Tech stocks, once high-flyers, are now Wall Street's turkeys

Global stock and bond markets have been battered in recent weeks by investor worries over rising interest rates, slowing economic growth and tough trade talk out of Washington and Beijing. But the giant U.S. tech stocks that long powered the bull market have been downright bloodied, with investors unable to find a safe haven even in Apple Inc., the world's most valuable public company.

The iPhone maker's shares are down more than 20 percent from their all-time high after Apple's market value vaulted past $1 trillion earlier this year. Apple and the other five horsemen of today's Internet economy -- Google parent Alphabet, Amazon, Facebook, Microsoft and Netflix -- together have lost nearly $1 trillion in market value in recent weeks, dragging down not just the tech-heavy Nasdaq composite but also the Dow Jones industrials index and the S&P 500-stock index.

"The tech sector has been hit particularly hard in the recent stock market pullback," noted Oxford Economics' chief U.S. economist, Gregory Daco. "Concerns broadly revolve around slower demand, rising trade tensions and fears of greater regulation."

Here's what's specifically alarming investors most right now:

Consumer and corporate sales are sagging

Disappointing to downright dismal earnings reports earlier this month from Alphabet and Amazon included company forecasts that signaled a slowdown in longtime growth markets. Evidence of a reduced appetite for Apple's latest iPhones was among the more distressing sales stories in the sector. The company offered a less-than-cheerful outlook for holiday sales in its fourth-quarter earnings report, hinting at softer-than-expected demand in the U.S. and abroad for its new $1,000-plus iPhones. The stock prices of Apple's biggest suppliers in the U.S., Europe and Asia tumbled on the news. 

Government regulations are coming

Facebook and other major tech companies with broad consumer reach have tumbled on thinking that heightened government regulation will hit profits, with social media companies especially on the defensive amid the proliferation of fake news and security breaches. "Eight international parliaments, including the U.K., Canada, and Australia, have requested hearings with Facebook leadership over the negative impact the platform has had on the democratic process," Oppenheimer analyst Jason Helfstein wrote in a client's note. Almost no one on Wall Street sees the pressure easing anytime soon.

Trade winds are blowing through supply chains

The imposition of tariffs this fall on key products like semiconductors already is leading to heightened costs for businesses and disrupting global supply chains as suppliers and their customers seek new locales to avoid both the latest tariffs and a new round of retaliations threatened for January, according to Oxford Economics' Daco. 

Additionally, he noted an "increasingly active effort" by the Treasury Department to scrutinize U.S. exports in certain new tech sectors, such as artificial intelligence and robotics. "These rules could have a severe impact on U.S. exports, business investment and GDP, if imposed," Daco wrote.

Global economic growth prospects are slowing

Growth forecasts for 2019 have been revised downward for most of the world's major economies, with global GDP now expected to expand by 3.5 percent next year, compared with the 3.7 percent forecast in May, the Organization for Economic Cooperation and Development, or OECD, said Wednesday.

Even a seemingly small 0.2% shift in a $75 trillion global economy can add up fast. "Trade growth and investment have been slackening on the back of tariff hikes," the OECD noted. "Higher interest rates and an appreciating U.S. dollar have resulted in an outflow of capital from emerging economies and are weakening their currencies."

Gravity always wins in the end

After years of delivering gravity-defying returns, high-flying tech stocks had become among the most popular to own among mutual funds, hedge funds and other large investors. But just as the Wall Street pack bought the stocks on the way up, the herd is heading for the exits en masse as well.

"There's no doubt that tech companies are widely owned, people have made a lot of money on them and we're finally seeing for the first time where the rotation is having some legs," Nate Thooft, senior portfolio manager at Manulife Asset Management, told the Associated Press. "They're selling the winners and redeploying the money somewhere else."

Where the so-called smart money ultimately redeploys all that money remains to be seen.