Shares of Snap fell 43.08% Tuesday, dragging down other major tech stocks on negative quarterly forecasts. File Photo by Monika Graff/UPI | License Photo
May 24 (UPI) -- The Nasdaq Composite tumbled Tuesday as Snap recorded its largest-ever one-day drop and dragged down other tech stocks with a negative advertising forecast.
The tech-heavy Nasdaq closed the day down 2.35%, while the broad S&P 500 fell 0.81%. The blue-chip Dow Jones Industrial Average eked out gains, rising 48.38 points, or 0.15%, after falling as much as 1.6% earlier in the session.
Shares of Snap fell 43.08% as CEO Evan Spiegel said the company would miss earnings and revenue targets for the current quarter. He cited rising inflation and interest rates, supply chain constraints and a downturn in hiring.
Some major tech players also saw declines following the forecast, with shares of Meta dropping 7.62%, while Alphabet fell 4.95% and Amazon slid 3.21% as both hit 52-week lows.
"The main culprit is the Snap warning from Monday evening," Adam Crisafulli of Vital Knowledge wrote in a note.
"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."
The 10-year treasury yield also slipped to 2.73% after reaching as high as 3.21% earlier in the year as investors turned to bonds amid fears of a recession.
Retail stocks also struggled Tuesday with Abercrombie & Fitch stock dropping 28.58% after reporting that freight and product costs hampered its first-quarter earnings.
Best Buy also ended the day up 1.21%, after shares were initially higher as it reported mixed quarterly earnings.
Tuesday's losses came after all three major indexes rallied to start the week.
Amid the movement, the S&P 500 sits 18.2% from its record high after falling into bear market territory, or 20% below a record high, on Friday.