NEW YORK — Stocks tumbled Thursday on Wall Street, with technology companies suffering their worst loss in seven years, after Apple reported that iPhone sales in China are slumping.
The rare warning of disappointing results from Apple reinforced investors’ fears that the world’s second-biggest economy is losing steam and that trade tensions between Washington and Beijing are making things worse.
The Dow Jones Industrial Average plunged 660 points, and the broader S&P 500 index fell 2.5 percent.
Apple stock plummeted 10 percent, erasing more than $74 billion in market value. Technology companies and other major exporters, including heavy-machinery companies, also took big losses.
Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets.
“For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,” said Neil Wilson, chief markets analyst at Markets.com. “Therefore, Apple’s rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific.”
Investors were also unsettled by a report Thursday that showed signs of weakness in U.S. manufacturing.
The U.S.-China trade dispute threatens to snarl multinational companies’ supply lines and reduce demand for their products. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions, combined with slower growth in China, were damaging their businesses.
“When the largest and second-largest economies in the world get into a trade dispute, the rest of the world’s going to feel the effects. That’s what we’re seeing now,” said Jack Ablin, chief investment officer of Cresset Wealth Advisors.
In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects