After Bank of America downgraded Apple Inc. from buy to neutral, its stock fell by 4.9%. The selloff reduced Apple’s market capitalization by about $120 billion.

A rare analyst downgrade caused another wave of selling pressure that caused the largest US technology stocks to lose hundreds of billions of dollars in market value, which caused Apple Inc. shares to fall.

The maker of the iPhone saw a 4.9% decline after Bank of America lowered its rating from buy to neutral and issued a warning about waning consumer interest in its well-known handsets. The selloff reduced Apple’s market capitalization by about $120 billion.

On Thursday, investors had few places to hide as the Federal Reserve continued to talk tough about rising interest rates as part of the central bank’s fight against inflation. The Nasdaq 100 Stock Index only saw three gainers and dropped 2.9%, coming very close to its June 16 low. Alphabet Inc., Microsoft Corp., and Amazon.com Inc. all experienced declines of close to 3%.

Following Chief Executive Officer Mark Zuckerberg’s announcement of plans to slash staff for the first time ever, Meta Platforms saw a 3.7% decline. In light of sluggish user growth, the social media giant’s shares have dropped 59% this year.

For the majority of this year, Apple has been regarded as a safe haven, beating other mega-caps and the broader IT index despite a sharp selloff sparked by recessionary fears. With a market value of around $2.3 trillion, the most valuable corporation in the world has now declined by almost 20% in 2022, versus a 32% decrease for the Nasdaq 100.

The demand for Apple’s services has already slowed, and product demand is likely to follow, according to BofA analysts lead by Wamsi Mohan, who noted that consumer spending is expected to chill across regions. A rising dollar will only exacerbate its problems, they claimed.

BofA anticipates unfavorable estimate revisions and valuation issues in the near future, despite the fact that “Apple’s long-term prospects remain strong.”

Investors are still ready for more pain as the Federal Reserve quickly raises interest rates and Wall Street analysts start lowering earnings predictions, even if the Nasdaq 100 is on track for its worst stretch of quarterly drops in 20 years.

According to statistics provided by Bloomberg Intelligence, predictions for 2023 profit growth for IT companies in the S&P 500 have fallen by approximately 6 percentage points since the start of 2022, compared to a decrease of 4 percentage points for the broader index.