(Reuters) – Nasdaq 100 futures fell nearly 2% on Thursday as Facebook owner Meta Platforms’ disappointing forecast triggered a slump in other social media companies and threatened to upend a nascent recovery in stock markets.
Meta tumbled 19.4% in premarket trading, as it posted a decline in global daily active users from the previous quarter for the first time, blaming Apple’s privacy changes and increased competition from rivals such as TikTok.
Other social media companies including Twitter Inc, Snap Inc and Pinterest Inc dropped between 6.6% and 15.2%.
The CBOE volatility index, Wall Street’s fear gauge, ticked up 1.07 points to 23.14 after hitting a near three-week low in the previous session.
“Short-term traders are likely taking profit on those rebound gains over the past week,” Peter Garnry, head of equity strategy at Saxo Bank, said.
“Overall, the underlying dynamics are unchanged in the market, with downside risks persisting, driven by inflation and tightening of financial conditions.”
The three major U.S. stock indexes rose for the fourth straight session on Wednesday, attempting a rebound from a sell-off in January, following strong earnings from Google-parent Alphabet and chipmaker Advanced Micro Devices.
At 5:02 a.m. ET, Dow e-minis were down 126 points, or 0.36%, S&P 500 e-minis were down 50.75 points, or 1.11%, and Nasdaq 100 e-minis were down 323.25 points, or 2.14%.
(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta)