US stocks were pounded in midday trading Tuesday — with heavy losses in the tech-heavy Nasdaq index – as investors braced for key earnings from Google parent Alphabet and Microsoft later in the afternoon.

The tech giants are set to disclose quarterly results against a backdrop of heavy volatility and investor anxiety on Wall Street.

Markets are under pressure due to the risks of a global economic slowdown, escalating COVID-19 lockdowns in China that could further disrupt global supply chains and likely aggressive action from the Federal Reserve to fight inflation.

The Dow Jones Industrial Average plunged more than 450 points as of about 12:35 p.m. ET, or about 1.36%. The tech-heavy Nasdaq index declined about 2.8% and the broad-based S&P 500 fell about 1.7%.

Stocks experienced similar swings a day earlier, the Dow fell nearly 500 points during the first half of trading only to stage a furious rally later in the day. The rally was led in part by news that Twitter’s board had accepted billionaire Elon Musk’s $44 billion offer to buy the social media firm.

Microsoft shares sank more than 2.4% and Alphabet fell 2.5% as each company prepared to report earnings after the closing bell. Other tech heavyweights such as Apple, Amazon and Meta are reporting later in the week – with potential major implications for the broader market.

“Given the picture of the market (right now), if any of these tech companies report earnings that are below expectations, it could be very dangerous because the downside is fragile,” Julius de Kempenaer, a senior technical analyst at StockCharts.com, told Reuters.

Twitter stock fell more than 3% on Tuesday after it initially surged on the Musk deal. Tesla shares fell about 10%, potentially on the prospect that the Twitter deal could add to distractions for Musk.

Stocks that struggled in midday trading included General Electric, which sank 11% ahead of its earnings report after warning that inflation was impacting its profits for the year. Inflation hit 8.5% in March, its highest level since 1981.

Investors will be watching closely in the coming days for signs on how the Fed plans to act on rate hikes.

Last week, Fed Chair Jerome Powell indicated a half-percentage-point hike could occur in May. The central bank typically hikes rates in quarter-percentage-point increments.

The prospect of sharp increases has stoked fears that the US economy could fall into a recession. In a note to investors Tuesday, Deutsche Bank analysts reiterated their view that a recession was likely to occur by 2023.

“Our strongly held view is that the sooner and the more aggressively the Fed acts, the less longer-term damage to the economy there will be,” the analysts said. “Markets just need to be shown that the Fed will do what is necessary and not tolerate prolonged inflation, even if it is ‘only’ in single digits.”

If Tuesday’s losses hold, they will add to the pain for investors who have weathered a weeks-long losing streak for US stocks. The Dow has finished lower for four consecutive weeks