Apple Becomes First Ever $2trn Company But Markets Wobble On Fed Uncertainty

Markets pulled back overnight in the US and Asia, with futures indicating more losses are likely today, after a lack of clear policy direction from the Federal Reserve triggered some profit taking combined with the fact the tone was not quite as dovish as some had hoped.

Minutes published from its latest meeting spooked markets after the notion of introducing yield caps - whereby the Fed would directly intervene to keep yields from soaring from current record lows - were quashed for now. In reaction, the S&P 500 closed down 0.4%, just off its record high, while Asian markets followed suit, with Japan’s Nikkei down 1% and Australia’s benchmark ASX 200 weaker by 1%. European shares have also opened lower with the FTSE 100 down 1.3% and Germany’s DAX down 1.5%

It comes after the record-breaking week for US markets saw another milestone achieved during trading hours, with Apple (AAPL) becoming the first company to hit a two trillion dollar market cap. Despite supply chain issues hurting the firm early in the pandemic, Apple’s earnings have proved resilient and the company has been caught up in the broader rally, boosting technology shares. Apple’s share price is up 57.6% year-to-date and 118% over the past 12 months, and it now occupies a 7% weighting in the S&P 500 index - which has a total market cap of $27trn.

Uber (UBER) and Lyft (LYFT) made headlines on Wednesday too, as the firms said that they will likely have to shut down in California if forced to comply with a court ruling, relating to how they classify their drivers. Both firms are appealing to a higher court, but as things stand, they will be made to recognise their drivers as employees rather than self-employed contractors. Both companies have seen their share price sink over the past three months while the broader market has rallied, with Uber down 14.7% and Lyft 8.7%. 

FDA drug rejections send pharma names lower

All three US stock indices fell slightly on Wednesday, with the Nasdaq Composite off the most at 0.6%. Biomarin Pharmaceutical (BMRN), Gilead Sciences (GILD) and Biogen (BIIB) were among the names that dragged the index lower. Both Gilead and BioMarin had non-Covid related drugs rejected by the US regulator on Wednesday, which triggered the sell-off. At the other end of the spectrum Target (TGT) enjoyed a big day, adding 12.7% after reporting its latest set of quarterly earnings, driven by growth in its online sales.

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