On Monday, Apple shares looked set to continue declining.
Dreamstime Following remarks made by Federal Reserve Chairman Jerome Powell that the central bank would continue with its plan to raise interest rates to combat inflation, major technology stocks including Apple and Alphabet seemed set to experience more declines Monday.
Higher interest rates are especially dangerous for growth stocks. The majority of the cash flow generated by growth corporations, like the U.S. IT behemoths, occurs years in the future. Future cash is less valuable than it was when interest rates were lower because of higher interest rates.
(ticker: AAPL) fell 3.8% on Friday and was down 1.3% in premarket trading on Monday. Powell stated in a brief speech at the Jackson Hole economic conference on Friday that the Fed would keep raising interest rates aggressively until inflation reached the 2% target set by the institution.
A Politico article claiming that Justice Department lawyers were in the early stages of crafting a prospective antitrust complaint against the iPhone manufacturer also put pressure on Apple stock. The department’s antitrust division intends to launch a case by the end of the year, according to a source with direct knowledge of the situation who spoke to Politico.
As of early Monday, shares of Alphabet (GOOGL), the parent company of Google, were down 1.1% after falling 5.4% on Friday as a result of Powell’s hawkish remarks.
(META), the company that owns Facebook, decreased 1.1% on Monday morning. On Friday, the stock lost over 4.2% of its value.
The social media behemoth was charged with enabling other parties, such as Cambridge Analytica, access to sensitive user data, and The Wall Street Journal claimed that Meta had agreed to pay the claim. A British consulting company was accused of gathering information on up to 87 million Facebook users without their permission during the Cambridge Analytica controversy. Former President Donald Trump’s 2016 campaign received assistance from Cambridge Analytica.
Early on Monday, shares of other tech behemoths were also declining.
After falling 3.9% on Friday, Microsoft (MSFT) was down 1%.
After closing Friday’s trading session down 4.8%, Amazon.com (AMZN) saw a 1.5% fall.