Apple warned that supply chain challenges remain even after easing in the latest quarter, and that demand in China was being hurt by COVID-19 lockdowns. Apple executives suggested that the supply constraints could cost Apple sales between $4 billion to $8 billion in the current quarter. The company also announced a $90 billion stock buyback and increased its dividend by 5%.
Amazon’s revenue forecast fell below analyst estimates as consumers slow online spending and return to in-person shopping. The company also posted a loss of nearly $8 billion on its investment in electric vehicle maker Rivian. The company’s AWS cloud business was once again a bright spot, with sales increasing nearly 37% to $18 billion.
Shares of Amazon are down about 15% this year. Apple shares are about 10% lower so far this year.
"With shares of Apple and Amazon, two of the most widely held stocks in index funds and ETFs, both in correction territory, and both offering tepid forecasts, it's hard to see where momentum will come from to stop the slide in the broader indices," said Caleb Silver, editor-in-chief of Investopedia.