Two great proxies for the health of the global economy are falling apart.

Tread carefully, bulls.

The Philadelphia Semiconductor Index, which measures the performance of household name semiconductor stocks such as Advanced Micro Devices (AMD) and Nvidia (NVDA), has plunged about 12% in the past month. At its current price level, the SOX – as it’s commonly known on Wall Street – is in a bear market, down a not so cool 15% from its 2018 high hit in mid-March.

Investors usually look to the SOX to gauge global consumer demand for often expensive smartphones or hardware for businesses. A sharp, prolonged decline in this forward-looking index could mean a slowdown in economic growth at least six months ahead. The opposite tends to be true on the economy when the index rises over a sustained period, as it did for most of 2017.

The SOX’s predictive powers may be on full display once again. Texas Instruments (TXN), viewed as a bellwether for the semiconductor space, said demand for its chips slowed in most end markets during the third quarter. The company blamed slower demand in the industrial and automotive spaces, but analysts pressed execs on a conference call if the U.S. tariffs on China were having an adverse effect.

“Most end markets have slowed, that’s what we know. And we believe this is mostly driven by a slowdown in semiconductors. As we have said before, the direct effect of the tariffs for us in any of the trade issues is minimal. It’s not there,” Texas Instruments chief financial officer Rafael Lizardi told analysts on an earnings call. The brush-off of trade concerns did little to soothe investors.

Texas Instruments shares fell 6% in early trading Tuesday. The company said it anticipates between $1.14 and $1.34 a share in profits for the fourth quarter. Analysts had expected $1.38 a share,

Those ice cold small-cap stocks

As if the semis’ selloff wasn’t enough to cause one to go hide under a rock, the small-cap Russell 2000 has also taken a beating in recent weeks. Similar to the SOX, the Russell 2000 is looked at for clues on how the U.S. economy is performing. It measures the price performance of 2,000, mostly small U.S.-centric companies.

The Russell 2000 has lost roughly 7% in the past month, worse than the S&P 500’s 6% drop. Fueling the decline are growing worries of how smaller businesses are dealing with the U.S. tariffs on China, rising inflation and interest rate increases from the Fed. As a result, concerns over a sharp slowdown in profit growth for domestic companies are now center stage.

Investment bank Jefferies notes that the third-quarter earnings growth rate for small-cap companies has fallen from about 20% three weeks ago to a rate of 15.6% today as more companies have reported.

“That [earnings growth slowdown] does have us concerned, as small-cap earnings is a good proxy for overall GDP growth and if numbers are falling, can this be the canary in the coal mine?” wrote Jefferies analyst Steven DeSanctis in a client note.

“The tariffs have had a devastating effect,” Marquis-Larson Boat Group CEO Rob Parmentier told Yahoo Finance on Tuesday.

Marquis-Larson sells high-priced yachts reaching $3 million. But with tariffs kicking in, Parmentier says he has been forced to raise prices significantly, and consumers have balked at the increases.

Paramentier didn’t rule out adjustments to the company’s workforce.

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Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi

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