Dow Plunges Over 600 Points After Apple Revenue Shortfall, Global Economic Slowdown Warning

U.S. stocks took a massive tumble Thursday following Apple's revenue warning, leading to fears of a global economic slowdown due to the ongoing trade war.

According to CNBC, fueling the fears of an economic crisis is a weaker-than-expected reading on U.S. factory activity.

Apple (AAPL) reported a massive shortfall in its holiday quarter revenue, the magnitude of which has sent shockwaves through the technology industry. This resulted to a more than 2 percent loss in all three major U.S. stock indexes, with the Nasdaq Composite reporting 3 percent.

The Dow Jones Industrial Average fell 660.02 points or 2.8 percent to 22,686.22 after Apple shares dropped 10 percent on Thursday. The 30-stock index fell to its low of the day right before the close, tumbling as much as 707.83 points. Thursday also marked the lowest Apple's shares have been since 2013.

As the tech sector fell 5.07 percent, the S&P 500 dropped 2.47 percent to 2,447.89. Nasdaq fell 3 percent to 6,463.50.

Apple revealed that it now predicts only $84 billion for its first-quarter revenue, as opposed to the $89 billion to $93 billion first thought. Consensus estimate from FactSet showed analysts predicting a $91.3 billion revenue.

"This piles on to existing anxiety of a slowdown in global growth," CEO of KKM Financial Jeff Kilburg said. "Apple can be used as a proxy to China's growth."

This comes after Apple chief executive Tim Cook blamed struggling business in China for the revenue shortfall in a letter to investors on Wednesday, according to Reuters. He also noted that the economic deceleration was worsened by the tensions in U.S.-China trade.

Following the Apple warning, chip stocks of Advanced Micro Devices, Nvidia, Skyworks and Qorvo all took a tumble, along with semiconductors. Skyworks fell more than 10 percent, while VanEck Vectors Semiconductor ETF (SMH) lost 6 percent.

Other companies that do big business in China were also affected by Apple's warning. Boeing saw a 4 percent drop, while Caterpillar shares fell 3.9 percent.

The U.S. is currently in the middle of striking a trade deal with China after imposing tariffs on billions of dollars worth of each other's goods. President Donald Trump stated Wednesday that the losses seen last month were a "glitch" and that things will get back to normal after the trade deal matter is settled. Despite his assurance, the previous month still marked the worst December decline since 1931.