Tech stocks led the dive Thursday on Wall Street after Apple reported a slowdown in iPhone sales in China.
The Dow closed down more than 600 points. Tech stocks fell 5 percent, the biggest for that sector since 2011. That prompted concerns about a global economic slowdown.
Diane Swonk, chief economist at Grant Thornton and an adviser to the Federal Reserve, says Apple’s announcement “reaffirmed or reinforced this idea that China is slowing more rapidly than many expected. We saw manufacturing data come out earlier this week that showed China’s manufacturing sector is slowing, and this may mean that also the Chinese consumer is pulling back a bit – and that sort of has ripple effects throughout the global economy, and particularly here in the U.S.
“Not only is this tariff related, it’s China specific, but China’s the second-largest economy in the world. It has tentacles, literally into almost every developed and developing economy in the world. So whatever happens in China actually does have spillover effects in the rest of the world.
“It could precipitate a global economic slowdown.”