Stock markets around the globe dropped Thursday after tech giant Apple said that sales of its devices had fallen sharply in China last month, perhaps signaling a broader slowing in the world economy.
The widely watched Dow Jones industrial average of 30 prominent U.S. stocks plunged 2.8 percent — more than 660 points — by the close of trading, after stock indexes in Europe and Asia closed with smaller losses. Apple's stock was down nearly 9 percent.
The stock declines came after Apple announced late Wednesday that its holiday sales were lower than it had expected, especially in China, the world's second-biggest economy after the United States. In addition, a key gauge of U.S. manufacturing unexpectedly hit a two-year low in December, indicating weak demand and exports.
Apple Chief Executive Tim Cook blamed the company's sales shortfall on the trade battle President Donald Trump is waging against China.
"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China," Cook wrote. "In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in greater China across iPhone, Mac and iPad."
More to come
Kevin Hassett, chairman of the White House Council of Economic Advisers, said the contentious U.S.-China relations would force other U.S. companies to cut their sales estimates in China.
"It's not going to be just Apple," Hassett told CNN. "There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China."
He said slowing consumer demand in China would give Trump an edge in trade negotiations.
"That puts a lot of pressure on China to make a deal," he said. "If we have a successful negotiation with China, then Apple's sales and everybody else's sales will recover."
The U.S. economy remains strong, with the country's 3.7 percent jobless rate at a nearly five-decade low. But economists say the U.S. economy could be slowing, and uncertainty in global economic fortunes has led to volatile daily swings in stock indexes in recent weeks.
In 2018, U.S. stock indexes suffered their worst year in a decade, with most of the losses recorded in December. The Dow was off 5.6 percent for the year, with the broader Standard & Poor's index of 500 stocks down 6.2 percent.