Stocks tumble with Fed’s next move in focus, Apple losses deepen: Stock market news today

Wall Street stocks tumbled at Thursday’s open, as building signs the US economy is running hot gave investors reason to believe the Federal Reserve will keep interest rates higher for longer.

The Dow Jones Industrial Average (^DJI) was broadly unchanged, but the other major stock gauges lost ground after all three closed in the red on Wednesday. The S&P 500 (^GSPC) dropped around 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) plummeted more than 1.5% as Apple (AAPL) sank nearly 4%.

Stocks are coming under pressure after data unexpectedly showed US services activity at a six-month high in August, seen as a sign of resilience among consumers and in the broader economy amid higher borrowing costs. Meanwhile, gains in Treasury yields (^TNX) have weighed on tech stocks, but eased slightly on Thursday.

Apple shares continued to fall after reports that China has forbidden government officials from using its iPhone and it plans to extend the ban to state companies. The move is a headwind for Apple in its biggest overseas market, which is also its global production base.

The run-up in oil prices (CL=F) that cast doubt on the Fed’s push to cool inflation took a step back on Thursday after China trade figures failed to ease worries about sluggishness in the world’s second-biggest economy. Questions are swirling about whether the slowdown in China could be a “top risk” to the US economy.

Added to a fresh batch of downbeat data from Europe, the data underlines worries about flagging global demand.

Against that background, an update on US initial jobless claims later Thursday could feed into the debate as to whether the Fed will be persuaded it needs to stick with high rates at its September meeting in a couple of weeks. Unemployment claims unexpectedly fell to their lowest levels since February.

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