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* Caterpillar, 3M tumble after Q3 results fail to impress
* Mcdonald's gains after comp sales tops estimates
* Verizon up on Q3 profit beat
* Chip stocks lower, analysts cite cyclic correction
* Futures down: Dow 1.55 pct, S&P 1.38 pct, Nasdaq 1.67 pct (Adds comment, details; updates prices)
By Amy Caren Daniel
Oct 23 (Reuters) - Wall Street was set to open sharply lower on Tuesday as disappointing earnings from industrial bellwethers Caterpillar and 3M piled on to concerns over Saudi Arabia's diplomatic isolation, Italy's finances and trade war fears.
Shares of Caterpillar sank 7.7 percent in premarket trading after the heavy-duty equipment maker just scraped past quarterly profit estimates as tariffs drove up material costs and the company opted not to raise 2018 earnings forecast.
3M Company fell 6.8 percent after its third-quarter sales missed estimates and the company cut its full-year profit forecast due to currency headwinds.
The disappointing forecasts from the two Dow Jones Industrial Average components added to concerns over the impact of rising borrowing costs and wages as well as tariffs on corporate profits.
"This is more about global GDP because 3M is cutting its FY forecast so that is a worry for U.S. investors worried about slowing growth: "Is the world slowing down and will our companies feel the pain?", said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
Profits of S&P 500 companies are expected to have jumped nearly 22 percent in the third quarter, slower than the previous two quarters and is expected to slow further in the fourth quarter, according to Refinitiv data.
A slowdown in China, dispute over Italy's spending plans and the stalemate over Brexit as well as the pressure on Saudi Arabia over the facts about the killing of a journalist sapped risk appetite across the globe.
"There are a number of underlying risk factors in the markets right now, be it U.S. interest rates, Brexit, Italian debt, trade wars or emerging markets," Craig Erlam, senior market analyst at online forex broker Oanda, said in a note.
"These are all destabilizing factors and sentiment may finally be caving under the weight of it all."
At 8:46 a.m. ET, Dow e-minis were down 392 points, or 1.55 percent. S&P 500 e-minis were down 38 points, or 1.38 percent and Nasdaq 100 e-minis were down 119.25 points, or 1.67 percent.
The heavyweight technology stocks that helped keep the Nasdaq afloat on Monday also buckled, with chipmakers leading the losses.
Intel, Micron and AMD fell between 1.8 percent and 4.4 percent. Analysts suggest a cyclical correction might be at play as the Philadelphia semiconductor index has pulled back more than the broader market this month.
Even the high-flying FAANG group of stocks were not insulated from the broad-based declines. Facebook, Apple , Amazon, Netflix and Google-parent Alphabet fell between 1.5 percent and 2.8 percent.
Amazon, Alphabet, Microsoft and Intel are expected to report results later this week.
All the earnings report on the day were not disheartening.
McDonald's rose 2.3 percent after it beat estimates for quarterly same-store sales as strong demand in international markets made up for slowing growth in the fiercely-competitive U.S. fast-food industry.
Verizon gained 0.5 percent after beating Wall Street estimates for profit and net new phone subscribers, helped by the popularity of its promotional offers subsidizing Apple's latest iPhones. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur)