World stocks fell yesterday as worries about softening demand for the iPhone dragged down shares of Apple Inc and persistent trade tensions between China and the United States sapped investor sentiment. Concerns about slowing economic growth also pushed down the dollar.
The US benchmark S&P 500 stock index opened lower as shares of Apple and its suppliers fell. The Wall Street Journal reported Apple had cut production orders in recent weeks for the iPhone models it launched in September.
Renewed tensions between China and the United States also weighed. At an Asia-Pacific Economic Cooperative meeting in Papua New Guinea over the weekend, the issue prevented leaders from agreeing on a communique, the first time such an impasse had occurred in the group's history.
US Vice President Mike Pence said in a blunt speech on Saturday that there would be no end to US tariffs on $250 billion of Chinese goods until China changed its ways.
The Dow Jones Industrial Average fell 335.06 points, or 1.32 per cent, to 25,078.16, the S&P 500 lost 36.12 points, or 1.32 per cent, to 2,700.15 and the Nasdaq Composite dropped 164.83 points, or 2.27 per cent, to 7,083.04.
MSCI's gauge of stocks across the globe shed 0.74 per cent. Federal Reserve policymakers are still signalling rate increases ahead but have recently raised concern about a potential global slowdown, leading some market watchers to suspect the tightening cycle may not have much further to run.
Yesterday, Goldman Sachs said that it expected the pace of US economic growth to slow towards the global average next year.
Data released yesterday by the National Association of Home Builders showed weakening sentiment in the US housing market, adding to concerns over growth.
Reflecting growth concerns and the possibility that the Fed's tightening cycle may soon end, the dollar dropped to a two-week low yesterday. The dollar index fell 0.25 per cent.
In similar fashion, the 10-year US Treasury yield has fallen from a recent top of 3.25 per cent. Benchmark 10-year notes last rose 1/32 in price to yield 3.0701 per cent, from 3.074 per cent late on Friday.
In Europe, Renault SA shares helped push the STOXX 0.7 lower as Carlos Ghosn, the joint chairman of Renault and Nissan Motor Co, was arrested for alleged financial misconduct.
In commodity markets, gold found support from the drop in the dollar and added 0.1 per cent to $1,222.76 an ounce. Oil prices gave up earlier gains as investors mulled the effectiveness of a potential cut in supply from OPEC and other exporters. Brent crude was down 70 cents a barrel at $66.06. US crude futures traded 15 cents lower at $56.31 a barrel.