After a broad rally on Wall Street on Monday, where the Dow Jones index rose closer to 2 percent, it fell sharply on Tuesday. But a small rally in the end softened the fall.
- The Dow Jones Industrial Average rose 0.15 percent.
- Technology Nasdaq was down 2.35 percent.
- The S&P 500 broad aggregator index closed down 0.80 percent.
- Nasdaq is particularly saddled with earnings forecast Monday night from Snap, the company behind Snapchat. Snap stock completely collapsed on Tuesday, down 43 percent. The company stated that it will reduce staffing and reduce expenses. Snap states that the current situation is the result of inflation, bottlenecks in the supply chain, and uncertainty about how Apple will change privacy requirements to affect the company.
Appeals for help from the Federal Reserve
Inflation is the specter of investors, and hedge fund manager Bill Ackman believes that the most offensive central bank, or market crash, is the only one capable of stopping inflation.
In a lengthy thread on Twitter, the director accuses the Fed’s central bank of not doing its job. Thus, the market must do the Fed’s job, and that’s what’s happening now, Ackman writes.
He points out that the number of job vacancies in the United States is rising at the same time as the unemployment rate has fallen at 3.6 percent.
He warns that “there is no possibility of a fundamental decline in inflation unless the Federal Reserve aggressively raises interest rates or the stock market crashes, spurring economic meltdown and calling for destruction.”
Ackman isn’t the only one who fears the future in the stock market.
There have been turbulent stock markets in recent weeks after the US Federal Reserve announced the highest jump in interest rates in decades. The market is unable to withstand the rise over several days. For a while on Tuesday, the tech-heavy Nasdaq was down about four percent.
catch the infection to techno
The drop in Snap’s share is spreading to other social media posts such as Facebook Meta owner, Google Alphabet owner, Twitter and Pinterest. The growth in the number of users has stalled at the same time that people fear an increase in interest rates. This hits Snap hard as the platform derives its revenue from the ad market. Today’s drop in Snap is the strongest for the stock ever, according to Bloomberg News.
Meta shares fell 7.6 percent, Alphabet five percent, Twitter 5.6 percent and Tesla 6.9 percent, while Pinterest fell 23.6 percent.
Shave over 1500 billion dollars
Bloomberg writes that today’s fall wipes out a market value of 1,580 billion kronor in social media.
In its earnings forecast, Snap wrote that the macroeconomic outlook has weakened further and that this happened faster than expected. Today’s earnings forecast comes on the heels of the company’s forward guidance on April 21, just over a month ago.
Among the stocks that stood out on Tuesday, apparel chain Abercrombie & Fitch, which closed 28.6 percent lower after disappointing the market both with first-quarter results and expectations for the rest of the year.
Electronics chain Best Buy delivered better than expected in the first quarter. But the chain failed to generate sufficient earnings per share. The stock closed up 1.2 percent on Tuesday.
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