US stock market futures are signaling deep cuts to open the second trading session of 2019, with contracts tracking the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 all implying losses of more than 1.2 percent.

Dow, Tech-Heavy Nasdaq Take Deep Cuts on Thursday

As of 8:08 am ET, Dow futures had shed 301 points, or 1.29 percent, in Thursday pre-market trading, with S&P 500 futures taking losses of 1.24 percent. The tech-heavy Nasdaq was rocked even harder, dropping 128.25 points to 6,242.75 for a pre-market loss of 2.01 percent.

CCN.com reported yesterday that although the Dow, S&P 500, and Nasdaq had managed to close Wednesday’s uneven trading session in the green, they would likely see losses at the opening bell following an after-market rout in tech stocks.

The move to the downside was preceded by Apple’s publication of an investor letter that slashed first-quarter revenue guidance, which at one point forecast revenue as high as $93 billion, to $84 billion. Apple CEO Tim Cook blamed a weaker-than-expected Chinese economy for the reduced guidance, noting that more than “100 percent of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac and iPad.”

Not surprisingly, Apple shares took an 8.43 percent haircut during pre-market trading, settling at a present value of $144.62 after closing at $157.92 on Wednesday. However, the guidance cuts — Apple’s first in 15 years — had a much broader impact on the tech sector and the US stock market at large.

Further complicating matters is that some analysts believe Apple may have to reduce its 2019 guidance at least once more due to the state China’s economy, which is facing problems included but not limited to the ongoing trade war with the United States.

“We see the potential for further downside to FY19 numbers depending on the trajectory of Chinese demand in early 2019,” wrote Goldman Sachs’ Rod Hall in a note to clients late Wednesday, per CNBC.

“We have been flagging China demand issues since late September and Apple’s guidance cut confirms our view,” Hal continued. “We do not expect the situation to get better in March and would remain cautious on the region.”

Stock Market Down: Just a ‘Glitch’ or Something More?

Goldman’s cloudy forecast does not bode well for US companies, which increasingly do business in the world’s second-largest economy. That fact places even more importance on negotiations intended to put an end to the US-China trade war, which, contrary to US President Donald Trump’s recent tweets, may not be on the brink of a deal.

.⁦@realDonaldTrump⁩ says there was a “glitch” in stock markets last month, but they will go up again as trade deals are made and have a long way (up) to go pic.twitter.com/GKgYEy5oDq — Jeff Mason (@jeffmason1) January 2, 2019

Trump said Wednesday that he believes that recent declines seen in the Dow and other major stock indices are just a “glitch,” not a symptom of weakeningfundamentals in an economy that enjoyed a phenomenal decade up until December 2018. Trump predicted that the markets would improve once the US and China arrived at a trade deal, a sentiment shared by Wharton finance professor Jeremy Siegel.

Siegel, alleging that bearish market forecasts are an overreaction, said that stocks remain “very attractive” at current valuations and that major indices would have a “very good year” in 2019, rising in the range of 5 to 15 percent.

Featured Image from Shutterstock. Price charts from TradingView.