Stocks fell on Thursday, erasing the previous session’s gains, as falling Apple shares weighed on the major averages.
The Dow Jones Industrial Average fell 603 points, or 2.03%. The S&P 500 and Nasdaq Composite fell 2.59% and 3.29%, respectively.
The sell-off was broad with only 10 stocks in the S&P 500 higher.
Apple shares fell more than 4% after Bank of America downgraded the tech stock to neutral from buy and cut its price target, citing weaker consumer demand for the iPhone maker.
“When you get to that level of concentration, you’re also going to have more volatile indexes,” said Robert Cantwell, portfolio manager at Upholdings. “Apple just wants you to think it’s a macro problem rather than a product cycle problem. But the reality is they’re dealing with both right now.”
A stronger-than-expected jobless claims report didn’t help sentiment, building on the idea that the Federal Reserve will continue aggressive rate hikes to fight inflation without concern that it will hurt the labor market.
The 10-year U.S. Treasury yield recovered to trade around 3.79%. A day earlier, it posted its biggest one-day drop since 2020 after briefly topping 4%.
The moves followed a broad rally in stocks on Wednesday as the Bank of England said it would buy bonds in an effort to help stabilize its financial markets and the cratering British pound. Sterling has fallen to record lows against the US dollar in recent days.
It marked a sharp turnaround from the aggressive tightening campaign that many global central banks have undertaken to deal with rising inflation.
The Dow gained more than 500 points, or 1.9%, on Wednesday, while the S&P 500 rose nearly 2% after hitting a new market low on Tuesday. Both indexes broke six consecutive losing days.
“For a more sustained recovery, investors will need to see convincing evidence that inflation is coming under control, allowing central banks to become less aggressive,” UBS’s Mark Haefele wrote in a note on Thursday.
Wednesday’s rally put the major averages on pace for a losing week and their worst month since June. The Nasdaq Composite led the monthly losses, down 8.4%, while the Dow and S&P are about to close down 7% and 7.5%, respectively.