top line
The stock market fell on Tuesday—reversing a comeback rally a day earlier—as the months-long selloff on Wall Street persists with investors continuing to offload shares amid a gloomy profit outlook from Snap, which sent tech stocks plummeting and led to rising recession fears .
Tech stocks were particularly hard-hit by Snap’s profit warning.
facts
The Dow Jones Industrial Average was down 0.2%, nearly 100 points, while the S&P 500 lost 1.2% and the tech-heavy Nasdaq Composite 2.5%.
The relentless market selloff resumed on Tuesday—despite a rebound led by financial stocks a day earlier, with seven straight weeks of losses briefly pushing the S&P 500 into bear market territory last Friday.
“Stocks are getting hit hard” and the “main culprit is the Snap warning” from Monday evening, says Vital Knowledge founder Adam Crisafulli, after the social media company warned that it expects both quarterly sales and profit to fall short of its own estimates.
Snap’s stock fell over 40% after the company blamed its gloomy outlook on a “macroeconomic environment [that] has deteriorated further and faster than anticipated,” weighing on markets and dragging shares of other tech companies (that rely on advertising revenue) lower.
“We expect all online ad platforms to feel some impact of a significant consumer pullback,” Morgan Stanley analysts wrote following the Snap announcement, as shares of Google-parent Alphabet fell nearly 5%, Roku over 7%, Facebook-parent Meta nearly 8 % and Pinterest over 14%.
In other news, shares of Abercrombie & Fitch fell over 25% after it became the latest major retailer (following the likes of Walmart, Target and Kohl’s last week) to see profits take a hit from inflationary pressures and rising costs.