U.S. stocks fell sharply on Thursday following a dire quarterly warning from Apple. The iPhone maker blamed a slowing Chinese economy for the shortfall, intensifying fears that the global economy may be slowing down because of the ongoing trade war. A weaker-than-expected reading on U.S. manufacturing added to those fears. The Dow Jones Industrial Average dropped 660.02 points, or 2.8 percent, to 22,686.22 as Apple shares led the decline. The 30-stock index tumbled to its low of the day right before the close, trading down as much as 707.83 points. The pulled back 2.47 percent to 2,447.89 as the tech sector fell 5.07 percent. The Nasdaq Composite tumbled 3 percent to 6,463.50, snapping a five-day winning streak, as Apple's stock dropped nearly 10 percent. Thursday marked Apple's worst session since 2013. Apple said it sees first-quarter revenue of $84 billion vs. a previous guidance of a range of $89 billion and $93 billion. Analysts expected revenue of $91.3 billion for the period, according to the consensus estimate from FactSet. Apple blamed most of the revenue shortfall for struggling business in China. "This piles on to existing anxiety of a slowdown in global growth," said Jeff Kilburg, CEO of KKM Financial. "Apple can be used as a proxy to China's growth."

Chip stocks Advanced Micro Devices, Nvidia, Skyworks and Qorvo all dropped on the Apple warning. Skyworks lost more than 10 percent. Semiconductors fell broadly with the VanEck Vectors Semiconductor ETF (SMH) dropping 6 percent. "While it's likely a combination of both macro and micro, the contribution of the former means that maneuvering through the upcoming earnings season will be like swimming in shark infested waters," said Peter Boockvar, chief investment officer at Bleakley Advisory Group, about what prompted Apple's guidance cut. "That said, I'd argue it's more of the latter." Apple's warning also dragged down other companies that do big business in China. Caterpillar shares were down 3.9 percent. Boeing shares dropped 4 percent. "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Apple CEO Tim Cook wrote in a letter to investors on the warning. "We believe the economic environment in China has been further impacted by rising trade tensions with the United States. As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed."