Apple reported strong iPhone sales and rebound in revenue from China, giving a much-needed boost to two parts of the company’s business that had struggled over the past year. That better-than-expected performance reassured Wall Street investors that key parts of its business are holding steady as Apple struggles to keep pace with rivals in the artificial intelligence race and navigates President Donald Trump’s looming tariffs.

Apple faces regulatory rulings in Europe that threaten to undermine its lucrative App Store business. Apple said sales from its services business, which includes the App Store as well as music and cloud storage, were $27.42 billion, topping analyst expectations of $26.8 billion.

Apple's fiscal third-quarter results are expected out Thursday afternoon, with investors focused on the company's ability to contend in AI and financially manage the evolving tariff landscape.