Dow tumbles more than 500 points, Nasdaq sheds 3% as Apple slides

Stocks slumped Thursday, erasing gains from the previous session, as tech stocks slid on the back of a decline in Apple shares.

The Dow Jones Industrial Average dropped 603 points, or 2.03%. The S&P 500 and Nasdaq Composite declined 2.59% and 3.29%, respectively.

Apple shares fell 3.7% after Bank of America downgraded the tech stock to neutral from buy and slashed its price target, citing a weak consumer.

A stronger-than-expected jobless claims report didn’t help sentiment, building on the notion that the Federal Reserve will keep doing aggressive rate hikes to fight inflation without concern it’s going to hurt the labor market.

The 10-year U.S. Treasury yield rebounded to trade at about 3.79%. A day prior, it posted its biggest one-day drop since 2020 after briefly topping 4%.

The moves followed a broad rally for stocks Wednesday, as the Bank of England said it would purchase bonds in an effort to help steady its financial markets and the cratering British pound. Sterling has stooped to record lows against the U.S. dollar in recent days.

It marked a stark shift from the aggressive tightening campaign many global central banks have undertaken to cope with surging inflation.

The Dow on Wednesday gained more than 500 points, or 1.9%, while the S&P 500 rose nearly 2% after hitting a new bear market low on Tuesday. Both indexes snapped six-day losing streaks.

“We are skeptical that the calmer mood in markets on Wednesday marks an end to the recent period of elevated volatility or risk-off sentiment. For a more sustained rally, investors will need to see convincing evidence that inflation is coming under control, allowing central banks to become less hawkish,” UBS’ Mark Haefele wrote in a Thursday note.

Wednesday’s rally put the major averages on pace for a losing week and their worst month since June. The Nasdaq Composite is leading the monthly losses, down about 8.4%, while the Dow and S&P are on pace to close 7% and 7.5% lower, respectively.