U.S. stocks closed sharply lower Tuesday, extending a pre-Thanksgiving rout that has been fueled mostly by a selling in shares of technology and internet-related companies, but has now spread to ensnare the broader market. Sharp declines in Target and Lowe’s after disappointing earnings also contributed to the tone.

U.S. financial markets will be closed Thursday for the Thanksgiving Day holiday and see an early close Friday.

The Dow Jones Industrial Average DJIA, +0.19% fell 551.8 points, or 2.2%, to end at 24,465.64, and tumbled by as many as 648 points at the session’s lows. The S&P 500 index SPX, +0.29% was down 48.84 points, or 1.8%, at 2,641.9, while the Nasdaq Composite Index US:NQZ8 was off by 119.65 points to 6,908.82, a drop of 1.7%.

The Nasdaq remains in correction territory, down more than 14% from August peak, while the S&P closed just 4 points shy of a correction, defined as a 10% decline from an index’s most recent highs.

The drop erased year-to-date gains for both the Dow and S&P 500, while the Nasdaq now clings to a 0.1% gain on the year. Month-to-date, the Nasdaq has fallen 5.4%, the S&P and Dow have retreated 2.6% in November.

Monday’s decline resulted in the S&P 500 and the Dow’s worst start to a Thanksgiving week since 2011, while the Nasdaq registered its worst such start since 2000, according to Dow Jones Market Data.

What’s drove the market?

U.S. investors continued to be plagued by doubts surrounding slowing global growth, U.S.-China trade relations, and the steady rise in interest rates that can be expected to continue into next year. These doubts have accumulated to induce fears that we are growing nearer to the end of the current economic expansion, strategists say.

The previously highflying technology sector has the most to lose from this change in sentiment. Tech stocks extended a decline that led the market lower Monday, with reports from China adding fuel to the day’s selling after officials in Beijing uncovered widespread evidence of anticompetitive behavior by Korean rivals. According to The Wall Street Journal, Beijing investigators implicated Samsung Electronics 005930, +0.17% , SK Hynix 000660, +0.71% and Micron Technology MU, -0.76% .

Market participants believe that China’s investigation may intensify festering issues around trade relations between China and other major counterparts, including the U.S.

Oil futures accelerated their decline, plunging 7%, with the U.S. benchmark finishing at a more-than-one-year low. The S&P 500 energy sector led decliners, falling 3.3%.

Read:Why plunging oil prices now hurt—yes hurt—the U.S. economy

Tuesday’s selloff was broad-based, but this time led by the Dow, with all 30 components trading lower on the day, as negative sentiment and fears of growing macro headwinds spread from tech investors to traders of blue-chip stocks.

Meanwhile, Target Corp.’s TGT, +0.65% stock plunged Tuesday, after the discount retailer reported fiscal third-quarter earnings and same-store sales that missed expectations. The retailer’s loss helped spark a broader selloff in the retail sector, with the SPDR S&P Retail XRT, -1.52% falling more than 3%, nearly twice the loss suffered by the broader S&P 500 index.

What are strategists saying?

“For years, the tech sector has benefited from broad multiple expansion,” Dave Smith vice president of equity analysis at Bailard Inc., told MarketWatch. “And it was easy for investors to just ride that momentum.”

After November’s tech-heavy selloff that continued Tuesday, “tech multiples have contracted to be in line with the rest of the S&P 500, something we haven’t seen for years,” Smith said, adding that this creates buying opportunities those brave enough to wade into today’s choppy market.

“It’s so hard to say when sentiment is going to turn positive again,” Smith said. “The one thing I can say for sure is that we’re in for more volatility.”

“Economic data remain strong, but the trend in the trend is deteriorating,” Peter Lazaroff, co-chief investment officer at Plancorp, told MarketWatch. He made the case that the recent turn in sentiment is due to investors believing that we’ve already experienced the fastest rates of growth for both the U.S. economy and corporate earnings.

“Economic conditions are good, but the chances of economic conditions deteriorating over the next year or more is much higher than a surprise on the upside,” Lazaroff said.

At the same time, Lazaroff emphasized that volatility levels have merely returned to ordinary levels, whereas the low volatility that has characterized much of today’s bull market is the outlier. “This sort of price action is extremely normal,” he said. “What was strange was the outsize returns investors have earned in recent years with effectively no volatility.”

Which stocks were in focus?

Shares of Apple Inc. AAPL, +1.02% fell 8.9%, extending the previous session to leave the stock in bear-market territory, defined as a drop of at least 20% from a recent peak.

Check out: Ray Dalio says it’s just like the 1930s for investors right now’

Shares of Kulicke & Soffa Industries Inc. KLIC, +1.54% rose 6.7% Tuesday, after the semiconductor-equipment maker beat fiscal fourth-quarter earnings expectations. The stock had been down roughly 12% at the start of trade, before reversing those losses Monday morning.

Lowe’s Cos.’s stock LOW, -0.05% fell 5.7%, after the home-improvement retailer reported fiscal third-quarter earnings that beat expectations but same-store sales that missed.

Target shares traded 10.5% lower Tuesday, after the retailer announced fiscal third-quarter earnings and same-store sales that came in below Wall Street estimates.

Cambell Soup Co. CPB, +3.60% shares rose 5.7% Tuesday, after a third-quarter earnings report that showed the firm beating earnings estimates, while the company affirmed its upbeat guidance for 2019.

Hormel Foods Corp. HRL, +1.30% closed down 1%, after missing revenue estimates in a Tuesday morning earnings report.

Shares of Kohl’s Corp. KSS, -1.53% fell more than 9%, even after the firm beat Wall Street estimates for earnings and profit and raised its full-year 2018 guidance. Shares of the discount retailer are still up 18.9% year-to-date.

Shares of Analog Devices, Inc. ADI, +0.16% closed higher, up 4.1% after beating analyst estimates for fiscal fourth quarter earnings and revenue in a Tuesday-morning earnings release.

Best Buy Co Inc. BBY, -1.61% stock rose 2.1%, following a Tuesday-morning earnings release that showed the firm beating earnings and revenue estimates.

Shares of L Brands Inc. LB, -1.59% closed down 17.7%, after the retailer announced Monday evening that it planned to slash its dividend.

Agilent Technologies Inc. A, -0.58% shares rose 7.8% Tuesday, after beating analysts estimates for profit and sales in the fourth quarter.

What data did investors watch?

Housing starts came in at a 1.228 million seasonally adjusted annual rate in October, while permits came in at a 1.263 million rate, with housing starts coming in just below consensus estimates per a MarketWatch poll of economists. Year-over-year, growth in housing starts has steadily slowed in 2018.

Investors are particularly focused on the housing market after a disappointing read in home builders’ confidence on Monday, which contributed to Monday’s decline.

How did other markets trade?

Stock markets in Asia traded lower Tuesday, with Japan’s Nikkei NIK, +0.44% losing 1.1%, Hong Kong’s Hang Seng Index HSI, -1.81% down 2%, and the China’s Shanghai Composite Index SHCOMP, -1.72% falling 2.1%.

European stocks declined Tuesday, with the Stoxx Europe 600 SXXP, -1.02% , and Germany's DAX 30 DAX, -0.28% ending the day down more than 1%. The FTSE 100 UKX, -1.29% , closed Wednesday down 0.7%