Tech giants fall affect futures to drop 1 pct

U.S. stock futures dropped by up to 1 per cent on Tuesday as a technology rout in the previous session sparked by concerns over iPhone sales sapped investors' appetite for high-growth companies.

Shares of Apple Inc lost 1.4 per cent in premarket trading, putting it on course for its seventh decline in the past nine sessions, and around 20 per cent down from a peak earlier this year that valued it at more than $1 trillion.

Signs of slowing demand for the company's flagship iPhones have wide-ranging implications for technology and internet companies at a time when investors are fretting over peaking corporate earnings growth, rising borrowing costs, and a global economy weighed down by trade tensions.

The FANG group of high-growth technology-focussed stocks continued to lose steam. Facebook Inc, Amazon.com Inc, Netflix Inc and Alphabet Inc were all down between 1.5 per cent and 2.01 per cent. In the "bear market," terminology often used to discuss broader stock market moves, all four were close to fitting the criteria of a 20 per cent fall from their record closing high.

Chipmakers Advanced Micro Devices Inc and Micron Technology Inc both lost more than 3 per cent while Nvidia Corp and Intel Corp fell 2.3 per cent and 0.5 per cent respectively.

"It seems investors have two key concerns. One is the anxiety over the trade tensions narrative, and two, what will the Fed do next," said Hussein Sayed, Chief Market Strategist at FXTM.

"With all three major indices trading below their 100- and 200-days moving averages and all the FAANG stocks in bear territory, it now requires a solid shift in fundamentals to revive confidence."

At 6:55 a.m. ET, Dow e-minis was down 125 points, or 0.5 per cent. S&P 500 e-minis was down 14.75 points, or 0.55 per cent and Nasdaq 100 e-minis were down 63.25 points, or 0.95 per cent.

Comments by New York Federal Reserve President John Williams on Monday that the U.S. central bank is pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance played into the pressure on stocks.

Among other early movers, Target Corp tumbled 5.9 per cent after posting lower than expected third-quarter profit. Shares in home improvement chain Lowe's fell 5 per cent after it unveiled more restructuring plans in the face of worse than expected comparable sales numbers.