Stocks pull back as markets react to China’s ban on the use of Apple iPhones by government officials and government-backed firms. Analysts described this as a natural economic response as investors ponder how this action will influence the American technology industry.
Markets taking note of China’s iPhone ban
The move adds to Apple’s challenges as it directly impacts its biggest non-U.S. market. The Chinese market makes up a sizeable chunk – about 19% – of Apple’s total revenue. Although drastic, it seems, according to an anonymous CNN source, that China has been implementing this policy non-officially since the Covid-19 pandemic and is now making it official in a bid to safeguard sensitive information.
Some speculate that this ban is a reprisal for a similar move by the U.S. Whatever the outcome, these political decisions have a direct impact on the economic welfare of brands with invested Chinese interests.
Apple’s share price dipped by 7%, and the Nasdaq responded with a 1% decrease. As the shares came in below the crucial 100-day moving average, some analysts hailed it as a bearish sign. Companies associated with Apple also experienced price losses. These include Qualcomm Inc. and Micron Technology Inc.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
Additionally, investment giants Tesla Inc. and Nvidia Corp. slid by at least 2%. Americas at Oanda senior market analyst, Edward Moya, stated:
The Nasdaq is sinking as one bad Apple spoils a bunch of mega-cap tech stocks. Apple’s growth story is heavily reliant on China, and if the Beijing crackdown intensifies, that could pose a big problem to the bunch of other mega-cap tech companies that rely on China.
