Oil giant Saudi Aramco eclipsed Apple to become the world’s largest firm by market capitalization, media reports, citing data from Refinitiv.
Aramco’s market valuation reached just under $2.43 trillion on Wednesday against Apple’s $2.37 trillion, data shows.
Apple’s shares dropped more than 5% during trading in the US on Wednesday, while losing nearly 20% since its $182.94 peak on January 4. Investors are promptly selling off technology stocks amid the unstable economic environment, with hiked interest rates, soaring inflation, and supply chain problems.
Energy stocks and prices, on the other hand, have been rising, largely amid fears of supply disruptions due to Western sanctions on Russia over the conflict in Ukraine. This gave a boost to the energy giant’s value, with Aramco’s stock currently up roughly 27% in 2022. At the end of the fiscal year 2021 in March, the company said last year’s profits more than doubled on the jump in oil prices.
Meanwhile, stocks wavered in morning trading on Wall Street as investors received another dire readout on inflation.
The S&P 500 fell 0.4% as of 10:26 a.m. Eastern. The Dow Jones Industrial Average fell 142 points, or 0.5%, to 31,814 and the Nasdaq was little changed%.
Technology stocks were among the biggest weights pressing on the broader market and tempering gains elsewhere. Apple fell 1.8% and Microsoft fell 1.4%.
Retailers gained ground, along with household goods companies. Amazon rose 1.6% and Walmart rose 1.5%.
The yield on the 10-year Treasury fell to 2.86% from 2.92%.
Major indexes are all in the red for the week as investors worry about rising inflation, rising interest rates and their impact on the economy.
The Labor Department on Thursday reported that wholesale prices soared 11% in April from a year earlier. Many of the costs at the wholesale level are being passed on to consumers as companies try to cover higher expenses. That has raised more concerns about a potential pullback in spending that could crimp economic growth.
Inflation pressure has been building for consumers. On Wednesday, the Labor Department’s report on consumer prices came in hotter than Wall Street expected. It also also showed a bigger increase than expected in prices outside food and gasoline, something economists call “core inflation” and which can be more predictive of future trends.
Rising inflation has prompted the Federal Reserve to pull its benchmark short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it may continue to raise rates by double the usual amount at upcoming meetings. Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.
Inflation has been worsened by Russia’s invasion of Ukraine and the conflicts impact on rising energy prices. China’s recent lockdowns amid concerns about a COVID-19 resurgence have also worsened supply chain and production problems at the center of rising inflation.
The impact of higher prices for consumers has been global. On Thursday, Britain said its economy grew at the slowest pace in a year during the first quarter. That is raising fears that the country may be headed for a recession.
The latest round of corporate earnings are also being closely watched by Wall Street. Entertainment giant Disney fell 1.5% after missing analysts’ forecasts in its latest earnings report. Coach and Kate Spade owner Tapestry jumped 12.7% after reporting strong financial results.