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- The S&P 500 is headed for its biggest drop in more than six weeks
- Weakness is Apple shares is a big reason for the market-wide decline, which is more pronounced in the tech-heavy Nasdaq index
At the root of the selling was weakness in Apple, which dropped as much as 2.8% on a report that orders for the recently-launched iPhone 8 have been cut for the rest of the year amid lukewarm interest. Since Apple is the most heavily weighted component in the benchmark index, any sharp fluctuation in the company’s stock can have an outsized impact.
Apple’s loss reverberated through the tech sector, sending an index tracking the group down 0.8%, the most out of any S&P 500 sector. Particularly vulnerable was Apple’s ecosystem of suppliers, as semiconductor companies declined roughly 1%.
The S&P 500 slid 0.2% at 11:01 a.m. ET in New York, after falling as much as 0.5% in early trading.
But Apple isn’t the only headwind facing the market — there are also some overseas pressures exerting downward influence. The Stoxx Europe 600 headed for its biggest decline in two months as the political crisis in Spain escalated, while dismal earnings reports surfaced from a handful of European companies.
The increased nervousness being felt in markets manifested itself in a sharp increase for the CBOE Volatility Index — or VIX, also known as the stock market fear gauge. It spiked as much as 17%, to more than 11 on an intraday basis, a threshold it hadn’t crossed in almost a month.
That might represent bad news for investors who have made shorting volatility one of the most popular and crowded trades in the market. They’re set to profit from a standstill market, and Thursday’s turbulence threatens a trade that’s been an easy way to make quick returns.
While no one would ever confuse Thursday’s selling with the 1987 market crash — which, by the way, is celebrating its 30-year anniversary — it does look as if investors are at least slightly spooked. And that’s not something you’ve been able to say in a while.