In the third quarter, S&P 500 lost 6.3%. As of Sept 30, 2022, the index lost one-quarter of its value. Risks are rising that the index will give up at least half of the 2020 pandemic-driven gains.
Investors should watch the core companies that lifted the S&P 500. Apple (AAPL), which enjoys a $2.2 trillion market capitalization, is about to sell more iPhone 14 units. Consumers battling inflation might choose food and necessities over a phone upgrade.
AAPL stock is 7.23% of the S&P 500 index.
Apple could report slower growth if customers delay their upgrade. In addition, they may cut back on their subscriptions for Apple TV, music, and app purchases. Investors will need to scrutinize Apple’s quarterly report.
In its upcoming report, Apple’s outlook will matter the most. Investors will need to differentiate the slowdown from lower demand and that caused by the supply chain disruption. The Q3 report will not factor in the uplift from the iPhone 14 upgrade cycle.
Microsoft (MSFT), which accounts for 5.85% of the index, needs to post strong cloud software sales. Any slowdown would send the index lower.
e-Commerce giant Amazon (AMZN) is 3.32% of the index weighting. The stock already corrected heavily. The company might post stronger retail sales which would help the index.
