and shattered recent positive momentum. The S&P 500 fell back under the 4500 level, a drop of more than 2.0% on the day, with Wednesday and Tuesday’s healthy gains and more now having been given back. The index still trades higher by about 1.3% on the week, but now trades more than 2.0% below Wednesday’s intraday highs near 4600.
Meta Platforms tanked a staggering more than 25%, wiping more than $200B off of the company’s market capitalization. If Meta shares close at current levels, that would mark the largest single-day valuation drop ever. The tech giant posted a weaker-than-expected earnings forecast, blaming new privacy changes on Apple devices and increasing competition from the likes of TikTok and YouTube. Meanwhile, for the first time in the company’s history, daily active users declined QoQ to 1.929B from 1.93B.
The more than 25% drop in Facebook’s share price on its own shaved 0.5% off the value of the S&P 500 index. But a contagion effect has seen other publicly traded social media companies also take a battering, with Twitter losing over 5.0%, Pinterest losing over 10% and Snapchat losing over 20%. Sentiment in other major tech/growth, which had recovered well in recent days also soured. Microsoft was down about 3.0%, Alphabet was down just under 2.5%, Netflix was down 5.3%, Apple was down 0.
The underperformance of tech and growth names meant that the Nasdaq 100 index faired the worst of the major US indices, dropping 3.8% to nearly erase all of its gains for the week. The Dow also suffered dropping 1.3%. The S&P 500 CBOEindex or VIX jumped back to 25.0 from Wednesday’s lows just above 20.0. Equity investors now await the aforementioned earnings from Amazon ahead of the US labour market report on Friday.