By Sruthi Shankar

Apple's shares sank 8.5 percent before the opening bell after the company slashed its holiday-quarter revenue forecast on slowing iPhone sales in China, the first major warning with the U.S. earnings season around the corner.

"Apple reiterates worries that China and trade issues have not been resolved," said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.

"People are worried that if a big name such as Apple has to report a decline in earnings, who else can be protected from something like that."

The warning from Apple, whose stock is a member of all the three major Wall Street indexes, rocked financial markets, as investors sought safety in bonds and less risky assets.

At 8:47 a.m. ET, Dow e-minis were down 256 points, or 1.10 percent. S&P 500 e-minis were down 25.5 points, or 1.02 percent and Nasdaq 100 e-minis were down 110.5 points, or 1.73 percent.

Apple's slide is a gloomy omen for Wall Street bulls hoping for an early gift in 2019 following December's steep selloff.

Though the selloff has made stocks cheaper, with the S&P 500's valuation now at 14 times expected earnings from 18 times a year earlier, earnings estimates have also been sharply cut.

Analysts on average expect S&P 500 companies to increase their earnings per share by nearly 7 percent this year, down from a forecast of 10 percent at the start of October and far below their expectations of 24 percent EPS growth for 2018, according to Refinitiv's IBES.

Apple's warning on China has the potential to weigh heavily on a wide variety of companies, ranging from its suppliers to firms that rely on China for a major portion of their sales.

Chipmakers, which count both Apple and China as major customers, led the decliners in premarket trading, with Intel Corp, Micron Technology Inc and Nvidia Corp falling between 1.9 percent and 3.3 percent.

Trade bellwethers Boeing Co and Caterpillar Inc dropped over 1.5 percent.

Apple's warning follows data earlier this week that showed a deceleration in factory activity in China and the euro zone, indicating the ongoing trade dispute was taking a toll on global manufacturing.

The impact on U.S. activity will be clear later in the day. The Institute of Supply Management is expected to report its index of national factory activity fell to a reading of 57.9 in December from 59.3 in November.

However, U.S. futures pared some losses after the ADP National Employment Report showed private sector jobs rose far more than expected in December.

Among other stocks, Celgene Corp jumped 33.7 percent after Bristol-Myers Squibb Co offered to buy the drugmaker for about $74 billion in a cash-and-stock deal. Bristol-Myers fell 9 percent.

(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)