Stock futures fell early Tuesday morning as the markets struggled to sustain a comeback rally following weeks of losses.
Futures on the Dow Jones Industrial Average fell 283 points, or 0.9%. S&P 500 futures dipped 1.3%, and Nasdaq 100 futures dropped 1.9%.
Snap shares plummeted more than 29% after the company said it’s bracing to miss earnings and revenue targets in the current quarter and warned of a hiring slowdown. Shares of Meta Platforms followed Snap lower, falling 6.7% in the premarket, while Pinterest lost 12.1%.
“Stocks are getting hit hard this morning and the main culprit is the Snap warning from Mon evening,” wrote Adam Crisafulli of Vital Knowledge. “Some are a bit incredulous that a relatively small and perennially unprofitable ephemeral social media firm can take down the whole tape, but given how sensitive this tape is, SNAP is able to punch above its weight.”
“Tech still dominates the market, both numerically (it remains the biggest weighting) and psychologically, and despite aggressive liquidation in the last couple of months, people still own a lot of it,” he added.
Shares of major tech companies followed Snap lower. Alphabet slid 3.5%. Amazon, Apple and Netflix were also down more than 1% each.
Meanwhile, Zoom Video shares popped 6.% after the company issued strong guidance for the second quarter.
The moves came a day after the market staged a rebound from last week’s steep market sell-off, which saw the Dow hit its first eight-week losing streak since 1923, and the S&P 500 briefly fall into bear market territory on an intraday basis.
Stocks rallied during Monday’s regular trading session as the Dow jumped 618 points, or nearly 2%, following a week of sharp losses. The S&P 500 rose 1.9%, and the Nasdaq Composite gained 1.6%.
The moves left investors wondering whether the bounce can hold or if it was yet another minor relief rally amid the relentless sell-off that has yet to reach a bottom.
“This kind of environment where you’ve got the whipsaw and ups and downs that are so big is a trading environment where it can feel on any given day like you were wrong yesterday and that is ripe for mistakes,” Sofi’s head of investment strategy Liz Young told CNBC’s “Closing Bell: Overtime.”
Bank stocks contributed to Monday’s gains led by JPMorgan, which jumped 6.2% after the company said it will reach key targets earlier than expected with the help of rising rates. VMware shares soared nearly 25% on news that Broadcom is reportedly in talks to acquire the clouder service provider.
Monday’s market rally was broad-based, with 11 sectors positive, led by financials. The sector added 3.23% and saw its best day since March 9.
Investors are looking ahead to new home sales and a speech from Fed Chair Jerome Powell at the National Center for American Indian Enterprise Development summit on Tuesday. Nordstrom, Best Buy, and Ralph Lauren are also slated to report earnings.
