Trump to Apple: Make the iPhone in the U.S., not China

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The sell-off also came after a surprisingly weak report on United States manufacturing.

AJ Bell investment director Russ Mould said the revenue warning has now "confirmed investors' worst fears" about the firm's future, as Apple is now expected to report its first year-on-year declines in sales and operating profit in two years.

The warning rattled already-volatile U.S. markets, further feeding worries about global economic growth that have dragged on stocks in recent weeks and turned 2018 into the worst year since the financial crisis for Wall Street.

Apple CEO Tim Cook said in a letter to investors earlier in the day that the contraction in China's smartphone market has been "particularly sharp".

Trump added that he has encouraged Apple Chief Executive Officer Tim Cook to build plants and more products in the U.S. Furthermore, Cook conceded that the revenue from iPhone sales was lower than anticipated. The Apple brand is extremely strong - Interbrand, for example, names it the most valuable brand on the planet. But he said then that he "would not put China in that category" of countries with troubled growth. FedEx Corp., Starbucks Corp., Tiffany & Co. and Daimler AG are also finding it harder to sell their wares in the world's second-largest economy.

Analysts and investors had been expecting a downturn in Apple's success for some time, after the company said it would stop disclosing unit sales data for its iPhones and other hardware products in November.

The underwhelming demand primarily came from China, Cook states, although the same can be said of iPhone sales "in some developed markets" as well.

Is it the China slowdown or is it just Apple?
But Cook specifically said then that he "would not put China in that category" of countries with troubled growth. That spells trouble for companies that rely on China's enormous market to boost their global sales.

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Apple's today also announced that the App Store saw record levels of spending over the holidays totaling $1.22bn between Christmas Eve and New Year's Eve. Makers of phone parts also fell. But China's tariff fight with the US and an avalanche of bad news about tumbling auto and real estate sales are undermining consumer confidence after two decades of nearly unbroken rapid growth.

After Asian markets tumbled overnight and European exchanges stumbled, USA futures were trading lower on Thursday morning, dragged down by Apple's stunning announcement Wednesday. The Nasdaq lost 202 points, or 3 percent, to 6,463.

Companies that make heavy machinery such as construction equipment are facing less demand as China's economy, the largest in the world after the USA, loses strength. "The fact that Apple didn't raise the issue of price in its pre-announcement letter maybe a reflection of the fact that there is no easy solution to the problem".

The broader S&P 500 fell 62 points, or 2.5 percent, to 2,447. Samsung, Apple's perennial rival in the premium portion of the smartphone market, is also said to be planning some fairly dramatic changes to its upcoming Galaxy S-series devices, too. Delta sank 7.6 percent.

In other commodities trading, wholesale gasoline rose 1.8 percent to $1.35 a gallon and heating oil climbed 2.4 percent to $1.74 a gallon.

Note to president Trump: that dire forecast is not good news for your prime economic indicator, the Dow Jones Industrial Average.

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