U.S. stocks were set to open sharply lower on Tuesday as poor forecasts from retailers including Target Corp and Kohls Corp for the holiday quarter fed into a market driven lower this week by concerns about demand for iPhones.
Another drop in Apple Inc in premarket trading was adding to the pressure as the stock that led the market through much of its bull run looked poised to open at its lowest level since May, putting the tech heavy Nasdaq on course to fall more than 2 percent at the open.
Should Apple's loss hold through the day, its shares would have lost more than 20 percent of their value, or around $250 billion, since closing at a record high on Oct. 3.
Goldman Sachs trimmed its price target on Apple for the second time in just over a week, saying the balance of price and features in the new iPhone XR may not have been well-received by users outside of the United States.
Retailers also took a hammering with Target down 11.1 percent after it posted a lower-than-expected third-quarter profit, with some analysts also pointing to evidence of weak demand for consumer electronics in Best Buy's results.
Kohl's Corp fell 12.4 percent after its full-year profit forecast fell below expectations.
Shares in home improvement chain Lowe's Companies Inc fell 7.3 percent after it unveiled more restructuring plans in the face of worse-than-expected comparable sales numbers.
"It's a growth related selloff. It's not a specific name. People think growth has peaked and earnings have peaked," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
"Some of the big retailers are now cracking and that's just adding fuel to the fire."
At 8:50 a.m. ET, Dow e-minis were down 363 points, or 1.45 percent. S&P 500 e-minis were down 39.5 points, or 1.46 percent and Nasdaq 100 e-minis were down 152.75 points, or 2.29 percent.
Signs of slowing demand for Apple's flagship iPhones have wide-ranging implications for technology and internet companies at a time when investors are fretting over peaking corporate earnings growth, rising borrowing costs, and a global economy weighed down by trade tensions.
The FANG group of high-growth technology-focused stocks continued to lose steam. Facebook Inc, Amazon.com Inc, Netflix Inc and Alphabet Inc were all down between 1.5 percent and 2.01 percent.
In the "bear market" terminology often used to discuss broader stock market moves, all four were close to fitting the criteria of a 20 percent fall from their record closing high.
Chipmakers Advanced Micro Devices Inc and Micron Technology Inc both lost more than 3 percent, while Nvidia Corp and Intel Corp fell 6.3 percent and 8.7 percent respectively.
A major Asia-Pacific summit's failure to agree on a communique resulted from certain countries "excusing" protectionism, a top Chinese diplomat said, in a veiled criticism of Washington that further sours the tone of China-U.S. ties ahead of a G20 meet.
"The fact is that a lot of trades seen recently resulted from frontloading ahead of the implementation of tariffs," said Christophe Barraud, Chief Economist at Market Securities.
"For me the biggest risk is the trade war."