Apple’s $2 trillion market valuation on shaky ground

Apple’s $2 trillion market valuation on shaky ground

Apple Inc.’s run as a $3 trillion stock proved fleeting. Now its grip on a $2 trillion market value is looking wobbly, too. After briefly surpassing $3 trillion in January, the iPhone maker has lost more than $800 billion in capitalisation as tech stocks plunged. With concern growing that the Federal Reserve’s interest-rate increases could tip the US into recession, the $2 trillion milestone is looking precarious. Apple closed Tuesday at $2.15 trillion. “In the same way that Apple benefited from the Fed-fueled bull market, it will suffer as the low interest rate and quantitative easing subsidies fade,” said David Trainer, CEO at investment research firm New Constructs. Economists predict the Fed will raise interest rates on Wednesday by at least half a percentage point, with some predicting a 0.75-point increase in the wake of Friday’s stronger-than-expected inflation data. Further increases are expected this year. All of that could deepen the selloff in tech stocks, which are particularly vulnerable to higher interest rates as they weigh on the current valuation of companies’ future profits. The FAANG cohort - Facebook owner Meta Platforms Inc., Apple, Amazon.com Inc., Netflix Inc. and Google parent Alphabet Inc. - were poster children of the two-year