U.S. stocks fell sharply on Tuesday with shares selling off into the close, as investors dumped equities on fears of an economic slowdown.
The tech-heavy Nasdaq Composite dropped 3.95% and hit a fresh 52-week low to close at 12,490.74. The index retreated further into bear market territory, sitting now about 23% off its high. The Dow Jones Industrial Average shed 809.28 points, or 2.4%, to 33,240.18. The S&P 500 lost 2.8% at 4,175.20.
For April, the S&P 500 is off 7.8%. The Nasdaq is down 12.2%, and the Dow has declined 4.2%.
Tech stocks led the decline Tuesday as investors did not wait around for Microsoft and Alphabet first-quarter results after the bell, fearing more blow-ups like the one seen in Netflix earlier in the earnings season.
"The risk-reward is just not there into big-cap tech earnings," Satori Fund founder and senior portfolio manager Dan Niles told CNBC's "TechCheck" on Tuesday. "I expect every single one of them to see forward numbers go down."
Microsoft and Google parent Alphabet both saw shares close down more than 3% ahead of reporting earnings. Facebook parent Meta, Amazon and Apple also finished lower Tuesday, with earnings results slated for later this week.
Netflix shares dropped nearly 5.5% and hit a new multi-year low. Last week, Netflix plunged 35% in a single day after reporting a surprising subscriber loss for the first quarter.
The strength in Big Tech stocks in recent years "is likely to burst when fundamentals start to meaningfully deteriorate as the overall economy slows," Wolfe Research's Chris Senyek said in a research note.
Worries about the global economy loomed. Investors are worried about a Covid surge in China. Regarding the war in Ukraine, a top Russian official said the threat of nuclear war is real. Plus, high inflation in the U.S. is denting demand for goods from houses to sneakers.
"There are a lot of economic growth concerns," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "China is a big customer for U.S. tech. ... The semiconductor industry does a lot of business there. But it's also concerns with growth here as well."
Tesla, which has a factory in Shanghai and counts China as a major market for its electric vehicles, was the biggest laggard on the Nasdaq Composite, closing down about 12.2%. The shares also came under pressure as its CEO and founder, Elon Musk, looked to close his proposed deal to buy Twitter for $44 billion.
Chip stocks were among the top decliners on the Nasdaq Composite. Nvidia lost 5.6%, and AMD retreated 6.1%.
Cyclical names tied to economic growth also suffered Tuesday. Dow component 3M fell about 3% despite better-than-expected earnings as the company noted macroeconomic and geopolitical challenges ahead. UPS shares also slid nearly 3.5% despite the shipper's quarterly earnings and revenue topping expectations.
Other industrial names like General Electric and Boeing were lower Tuesday. GE fell 10.3%, while Boeing eased 5%. GE warned that its 2022 outlook was "trending toward the low end of the range."
Bank stocks also struggled as interest rates fell. U.S. Treasury yields declined, with the benchmark 10-year rate falling below 2.8%. Wells Fargo dipped 2.7%, and Bank of America lost nearly 2.3%.