Warnings from Caterpillar and Nvidia about weakening demand from China signal investors could see more profit shortfalls from US firms that count on the second biggest economy for a big portion of their business.
Shares of Caterpillar and Nvidia sank after the two manufacturers joined a growing list of companies warning about the crippling effects of the fall-off in growth in the world's most populous country.
Apple, a host of chipmakers, and FedEx had already stoked fears of a global slowdown, particularly in a technology sector that depends heavily on China to drive revenue.
It does not bode well, several analysts said, for the rest of an earnings season that has only just started.
China's economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising US tariffs, dragging 2018 growth to the lowest level in nearly three decades.
President Donald Trump is bent on curbing what Washington says is Beijing's deliberate theft of American intellectual property and trade secrets.
Without progress in the weeks ahead, he has threatened a new round of tariffs from March 2.
Tariffs remain a concern for many companies this reporting period.
Whirlpool cited tariffs as a drag on its North American business and the company's stock fell in after-hours trading on a disappointing full-year forecast.
Asia-Pacific was Caterpillar's only region to record a fall in revenue, and Nvidia cut its fourth-quarter revenue estimate by half a billion dollars to just $2.2 billion.
That added to a previous number that was already $700m short of analysts' forecasts and was blamed chiefly on gaming revenue in China.
Analysts said the negative forecasts from Caterpillar and Nvidia really point to those areas of concern with trade, global economic activity and the potential impact of a strong dollar.
There could be more pain in the coming days and weeks. Advanced Micro Devices, due to report today, gets about a third of its revenue from China, based on Refinitiv's data, while Apple's results also are due later tonight.
Also due this week are Boeing, which derives roughly 13% of its revenue from China, and McDonald's, with about 18% of its revenue from China.
Technology's estimates have been among the hardest hit, and the sector's profit growth for 2019 is now estimated at just 1.5%, based on Refinitiv's data.
