The Dow Jones Industrial Average fell over 200 points Monday as technology names like Apple and Nvidia weighed heavily on the sector in Monday’s early trading session.
The woes continued for chipmaker Nvidia as shares fell over 6.3%. Last week, Nvidia reported third quarter earnings, outperforming analyst expectations, but missed on the revenue front.
Nvidia’s earnings per share came in at $1.84 per share, besting analysts expecting $1.71 per share. The culprit was revenue, which clocked in at $3.18 billion versus an expected $3.24 billion by Wall Street.
Further blame could be assigned to the chipmaker’s fourth quarter guidance as it’s expecting $2.70 billion in revenue for the final quarter while Refinitiv consensus estimates came in at a more exuberant $3.40 billion. The lower guidance came on expectations of surplus inventory for the quarter.
Apple shares fell 3% after a report by the Wall Street Journal revealed that the tech giant will be cutting production orders for the latest iPhones. The stock has been depressed by a spate of analyst downgrades, including Guggenheim Partners, which lowered its rating on the tech giant from “buy” to “neutral,” citing that a 5% decline in iPhone units will occur in 2019.
Despite beating earnings and revenue expectations for its fourth fiscal quarter, murky forecasts for iPhone sales caused investment firms like Rosenblatt Securities to downgrade the stock. Rosenblatt Securities changed their rating from “buy” to “neutral,” citing that higher iPhone prices won’t offset a weaker sales volume.
Broad weakness within the tech sector was evident in the technology-focused exchange-traded funds (ETFs)–Technology Select Sector SPDR ETF (NYSEArca: XLK)–down 2.14%, Vanguard Information Technology ETF (NYSEArca: VGT)–down 2.24%% and iShares US Technology ETF (NYSEArca: IYW)–down 2.33%. Technology, in general, is down 10% from its 52-week highs after being a major player in spurring the decade-long bull run that hit a peak this year prior to the October sell-offs.