Washington: US stocks crumbled on Monday, with a sell-off initially sparked by fears of weakening demand for Apple’s iPhone spreading to the rest of the market.
The losses compounded declines from the end of the prior week, when fears for global economic growth and inflationary pressures prompted investors to retreat.
The benchmark Dow Jones Industrial Average fell more than 600 points, losing 2.3 per cent to settle at 25,387.18.
The broader S&P 500 fell two per cent to finish at 2,726.22, while the tech-heavy Nasdaq sank the deepest, losing 2.8 per cent to close at 7,200.87.
Investment bank Goldman Sachs also fell 7.5 per cent, weighing on the financial sector, and embattled engineering giant General Electric had its lowest close in nearly a decade.
Earlier, the VIX, a measure of market volatility, had hit its highest level in a week.
By mid-afternoon, the broad-based slide prompted President Donald Trump to point the finger, while citing no evidence, at congressional Democrats, who won control of the House of Representatives in last week’s elections.
“The prospect of Presidential Harassment by the Dems is causing the Stock Market big headaches!” he wrote on Twitter. Markets rallied the day after the vote.
Early in the day, trading volume had been comparatively thin due to a public holiday — Veterans Day — which can favour volatility. Bond markets were also closed.
Meanwhile, Bloomberg reported that Trump was considering unveiling auto tariffs, sending General Motors into the red and helping push markets lower.
Apple, maker of the iPhone, had suffered during much of the day, with investors unnerved by slashed sales expectations from the manufacturer of a key component.
Shares closed down more than five per cent. Laser sensor maker Lumentum Holdings, the parts supplier, itself nosedived nearly 33 per cent.
“The ecosystem of the supply chain around Apple is starting to feel the slide of demand,” Matt Miskin of John Hancock Investments told AFP, noting that he still expected robust holiday season performance in the tech sector.
“With a weaker global growth, tech companies are starting to get repriced lower.”