Shares of the US tech giant Apple experienced a sharp decline for the second consecutive day on Thursday, resulting in a nearly $200 billion drop in its market value. The drop in Apple’s stock price was triggered by reports suggesting that China planned to expand its ban on the use of iPhones to government-affiliated organizations and state-owned corporations.
In just two days, Apple’s stock fell by seven percent, causing concerns to ripple through the broader US technology sector, with shares of other tech companies like Qualcomm, Micron Technology, Microsoft, and Nvidia also witnessing declines as fears of potential consequences spread.
Investors reacted nervously to the news of a potential ban by China, leading to a sell-off of various assets, including semiconductors, major tech stocks, and Chinese equities traded on US markets.
In addition to Apple, numerous American technology firms that rely on sales and manufacturing in China are now apprehensive about the possibility of being affected by Beijing’s potential ban in the future. Apple, in particular, is heavily dependent on the Chinese market and infrastructure for its production. However, a prolonged downturn in demand due to the real estate market crisis has adversely impacted Apple’s revenue margins.
Apple’s challenges have been further exacerbated by the recent rise in US Treasury rates, driven by investors selling bonds in anticipation of the Federal Reserve taking more aggressive measures to combat inflation.
Meanwhile, the leading consumer watchdog in the United States has turned its attention to Apple’s exclusive tap-to-pay system. It has cautioned technology companies against overly restrictive practices in providing access to payment applications and is in the process of formulating regulations pertaining to the sharing of customer financial data.
The Consumer Financial Protection Bureau has issued a warning that both Apple and Alphabet’s Google Pay, which collectively dominate the mobile device tap-to-pay market, may be limiting choices for end users. The bureau intends to introduce open banking regulations in the coming months to effectively govern how financial institutions handle customer data.