Apple Has Biggest Drop Since August

(Bloomberg) -- Apple Inc. shares fell on Tuesday, with the iPhone maker suffering its biggest one-day drop in months as trade tensions between the U.S. and China once again flared up.

The latest escalation started after U.S. President Donald Trump signaled he would be willing to wait for another year before striking a trade agreement with China. He told reporters that “I have no deadline,” dashing hopes that a “phase one” agreement would be reached within weeks. Subsequently, Commerce Secretary Wilbur Ross told CNBC that the U.S. would levy tariffs on China if nothing changes in the next two weeks.

Related: France Vows Retaliation Over $2.4 Billion U.S. Tariff Threat

“Apple continues to be in the crossfire” of the trade war, wrote Wedbush analyst Daniel Ives, who added that it, “more than any company out there,” had “the most to lose if this tariff war does not see a truce going forward.”

Shares of Apple sank as much as 3% on Tuesday, the biggest intraday percentage loss for the stock since Aug. 23. The stock was on track for its third straight down day, though it has gained nearly 50% since a June low and has recently been trading at record levels.

The tech giant is highly correlated to the trade issue, given it derived nearly 17% of its 2019 revenue from China, according to data compiled by Bloomberg. In addition, China is a major part of Apple's supply chain.

According to Wedbush, which reiterated its outperform rating and Street-high $325 price target on the stock, Apple's Foxconn factory “represents the hearts and lungs of the Cupertino iPhone franchise globally.” Ives expects “little pricing concessions happening from Asia suppliers to offset the potential tariff impact if negotiations went south.”

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm

©2019 Bloomberg L.P.