The stock market sank on Tuesday, continuing a decline that began before the long Labor Day weekend. Tech stocks were particularly hard hit, with market darling Apple (AAPL -1.00%) down more than 3% in the morning. The Dow Jones Industrial Average (^DJI 0.16%) was holding up better than the other major stock indexes, down 1.7% at 11:35 a.m. EDT today.

Along with Apple, Boeing (BA -0.33%) contributed to the Dow's decline. Reported manufacturing problems for the 787 Dreamliner added to the company's woes as air travel remains deeply depressed due to the pandemic.

Man holding head looking a declining charts.

Image source: Getty Images.

Apple sinks as iPhone launch nears

Shares of Apple were getting hit on Tuesday as tech stocks continued to sell off. Shares were down around 3.4% by late morning, bringing total losses since reaching a new all-time high earlier this month to about 13%.

Valuation may be part of the problem investors are suddenly having with the tech giant. At its peak, Apple shares traded for over 40 times earnings, the highest level in over a decade. The earnings multiple now sits around 35, still historically high.

Apple will launch a new slate of iPhones later this year, and has reportedly ordered at least 75 million devices from its suppliers. On Tuesday, the Nikkei Asian Review reported that Apple will begin initial production in mid-September, with mass production ramping up through early October. This is delayed a bit from previous years due to the impact of the pandemic.

Wedbush analyst Daniel Ives expects these new iPhones, equipped with 5G technology, to drive a supercycle for Apple, with users of older models rushing to upgrade. Ives rates the stock at outperform and maintains a $150 price target, with a bull-case target of $175.

That optimism wasn't enough to prop up Apple stock on Tuesday, as some negative commentary from Goldman Sachs analyst Rod Hall may have contributed to the sell-off. Hall rates Apple at sell, with an $80 price target, saying that Apple's non-iPhone businesses won't be big enough to drive sustainable growth.

How the 5G iPhone launch goes will help determine how Apple stock performs in the coming months. Economic stimulus measures helped drive demand for its devices during the worst of the pandemic, but with no new stimulus on the horizon, that tailwind has likely disappeared.

While Apple stock has taken a beating in recent days, shares of the tech giant remain up roughly 60% this year.

More production problems for Boeing

The 737 MAX is not the only aircraft causing big problems for Boeing. On Monday, The Wall Street Journal reported that air safety regulators will review lapses in quality control going back nearly a decade after production problems were discovered at a factory making the 787 Dreamliner. This is a separate issue from the one that prompted Boeing to ground eight Dreamliners in late August.

Boeing reportedly told U.S. regulators that certain parts manufactured in its factories in South Carolina didn't meet its own design and manufacturing standards. This has led the Federal Aviation Administration to consider enhanced or accelerated inspections for as many as 900 Dreamliner jets, although Boeing contends that the defects don't pose an immediate safety threat.

This development comes as air travel remains deeply depressed due to the COVID-19 pandemic. Passenger counts have been improving, but the Transportation Security Administration reported a nearly 60% year-over-year decline in passenger checkpoint throughput for Monday.

Boeing stock was down about 4.6% by late Tuesday morning on the Dreamliner news. Shares of the troubled company are down roughly 50% year to date.