Apple Inc AAPL shares are trading lower by 2.5% to $171.74 Tuesday afternoon. Apple shares are falling amid overall market weakness as traders and investors weigh concerns about future rate hikes following last Wednesday’s FOMC statement and lower-than-expected initial jobless claims data.
Why It Matters
Apple’s products, such as iPhones and MacBooks, are often purchased through financing options like loans or credit cards. Higher interest rates can increase the cost of borrowing for consumers, potentially reducing the affordability of Apple products. This could lead to lower sales and revenue for the company.
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Apple also holds significant cash reserves and also uses debt financing for various purposes. When interest rates rise, it becomes more expensive for Apple to finance debt, which can lead to higher interest expenses. This, in turn, can impact Apple’s bottom line by reducing its net income.
What’s Going On?
The Federal Reserve last week maintained the federal funds rate within the 5.25% to 5.5% range at its September meeting in a unanimous move.
The September dot plot reveals the median preference for the fed funds rate at the close of 2023 remains unwavering at 5.6%. This figure mirrors projections made back in June, hinting at the possibility of one more rate hike during either of the last two meetings this year…Read More
According to data from Benzinga Pro, AAPL has a 52-week high of $198.23 and a 52-week low of $124.17.
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