It has been another ugly day for Apple stock ($AAPL) and its investors. On Wednesday, May 12, shares of the Cupertino company dropped 2.4%, more so than the S&P 500 ($SPY), digging one layer deeper into correction territory.
This was Apple's third consecutive day in the red, as shares are now down about 6% for the week so far. In addition, three of the 10 worst days for the stock in 2021 have happened in the past two weeks alone.
At the current price of about $123, Apple shares are now worth as much as they were in August 2020. This represents nine months of crab-walking, sideways price action.
Also read: 3 Reasons To Confidently Buy AAPL Stock
Apple news of the day
While the Apple vs. Epic Games battle rages on and cautious Wall Street research reports continue to pour in, the big force behind Wednesday's bearish price action (in Apple shares, stocks in general and even non-equities markets) was fear of rampant inflation.
As reported by TheStreet:
Stocks [fell] sharply Wednesday after consumer prices in the U.S. jumped in April by the most since 2009 and added to concerns the Federal Reserve could lift interest rates sooner than it has signaled.
Generally speaking, higher inflation tends to lead to higher longer-term interest rates – note that the short end of the yield curve is more easily controlled by the Federal Reserve. Increased rates hurt growth and tech stocks in particular.
I explained recently why the disappointing jobs report released on Friday, May 7, was largely good news for Apple shares. But in the face of substantially higher CPI (the consumer inflation index), all the optimism from last week faded fast.
Also read: 3 Reasons To Sell AAPL Stock Without Regrets
Key metrics on Apple stock
Apple stock is squarely in correction mode, after tip-toeing around the $130 levels for a few weeks. Below is a recap of some important Apple stock-related figures:
- Down 7% for the year vs. the S&P 500's 9% and the Nasdaq's 1% gains.
- Down 14% from the January peak of $143 per share. This is the farthest that Apple stock has been to all-time highs since late March.
- Worth about $2.05 trillion, barely hanging above the $2 trillion milestone. A 3% decline from here would send Apple stock below these key levels.
I asked Twitter if nine months of unimpressive performance, after a year and a half of outstanding gains, makes Apple stock more or less enticing at its current price. Leave your opinion below.