First the iPod, Now This

One day after discontinuing the iPod, Apple is no longer the most valuable company in the world. Coincidence?🤔

😒 Not exactly… Oil giant Saudi Aramco, whose full-year profit last year more than doubled due to soaring oil prices, closed trading yesterday valued at $2.43 trillion. Apple shares fell more than 5%, pegging the company’s current value at $2.37 trillion.

• Saudi Aramco’s stock is up more than 27% so far this year.
• Over that same period Apple has fallen 16%, erasing around $500 billion in market value.

💻📉 The big picture: While the surge in oil prices is good for Aramco’s profits, near record-high inflation is driving the Fed to raise interest rates at the fastest pace in more than two decades. And as we’ve previously reported, higher interest rates usually lead to slower (or negative) growth for tech stocks because it reduces the value investors place on their future earnings.

• In the four day period following the Fed raising interest rates by half a point, tech giants lost more than $1 trillion in value.

💰📉 Zoom out: All three major US indexes finished yesterday in the red on the heels of the latest CPI report. (Dow: -1.0% | S&P: -1.7% | Nasdaq: -3.2%)