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Oil and stocks slide as tech fears are stoked by Apple's price hikes

Apple's price increases fueled concerns about?the inflationary effect of tech giants?, and oil prices fell to?their? lowest level in four months, despite the difficulties of reopening Strait of Hormuz. Apple's stock fell 6% Thursday, after the company said that it would no longer protect customers from soaring storage and memory chip costs. A media report that OpenAI might delay its IPO to next year also dampened market sentiment. Oil futures dropped more than 3%, and they were headed for steep losses every week as "more" stranded tanks left the Strait of Hormuz despite a cargo ship being hit in Oman. Saudi Aramco resumed Friday loadings at its Ras Tanura Terminal in the Gulf, after a near-four-month suspension. This is likely to boost supply.

European stocks fell by 0.8% while Wall Street futures predicted a fall of 0.5% to 1%. The tech sector led the steep declines in Asia, as MSCI's index for Asian stocks outside Japan fell 3%. South Korea's KOSPI fell as much as 9% in one instance, which triggered a "circuit breaker".

Mark Ellis, CIO of Nutshell Assets Management, said that although the short-term effect was inflationary, prices would come down over time due to increased efficiency. Apple's price hikes tempered investor excitement about Micron's blowout earnings report this week.

Analysts said that month-end and quarterly-end rebalancing flows could have also contributed to the choppy price movements in big tech shares, which outperformed during much of second quarter.

WEAK YEN

The yen was hovering near its lowest level against the dollar for 40 years at 161,59. This is beyond the 160 mark that many consider to be a line drawn in the sand by the Japanese authorities. The yen found little relief, even though the U.S. inflation rate met expectations and traders reduced bets on a Federal Reserve interest rate hike in September. Separate data showed that the U.S. economy grew faster in the first quarter than originally estimated thanks to a downward revised imports. However, consumer spending nearly stalled and cast doubt on the growth momentum of the second quarter.

The dollar index (which measures the strength of the currency against six major peers) fell 0.3% to 101.2 but was still not far off its highest level since May 2025.

Treasury yields fell on Friday. The 2-year yield dropped to 4.0901%, marking the fourth consecutive day of declines. Meanwhile, 10-year yields ended at 4.6951%.

Gold was the last precious metal to rise on the day, up 0.2% at $4,034. Reporting by Stella Qiu, Ankur Banerjee and Kevin Buckland; Editing by David Dolan, Alexander Smith and Kevin Buckland

(source: Reuters)