US equity futures declined Tuesday as Snap Inc.'s profit warning hammered technology shares premarket.
As of 0615 ET, Snap shares plunged 29% in premarket trading -- if losses hold up until the cash session, it would mean an $11.4 billion wipeout in market capitalization. Snap's peers, including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc., and Pinterest Inc. were all considerably lower, indicating if losses were held until the market opens, the group could see a mind-boggling $100 billion in market cap vanish.
Snap sparked the selloff on Monday after hours when it warned that second-quarter profit and revenue forecasts would miss Wall Street expectations amid deteriorating macroeconomic trends.
"Snap pointing out the obvious macro headwinds was yet another reminder for traders to not get back in too early.
"On the way down to what's looking increasingly like a full-on S&P bear market, we've seen all dip-buying end in tears for impatient investors," Max Gokhman, chief investment officer at AlphaTrAI.
Snap's profit warning is another sign that technology shares could remain under pressure as digital advertising slumps amid threats of stagflation spilling over into recession. Rising interest rates and soaring inflation have already battered technology companies.
"The market continues to turn itself inside out and back to front as it tries to decide if it has priced all of the impending rate hikes, soft landing or recession, inflation or stagflation, China, Ukraine, US summer driving season, supply chains, the list goes on," Jeffrey Haley, a senior market analyst at Oanda Asia Pacific, wrote in a note.
Nasdaq 100 futures slid about 1.7% at the time of writing this note, and S&P 500 futures tumbled 1.4%, both wiping out most of Monday's gains.
Fewer companies are topping earnings estimates this quarterly reporting season, and the scare in consumer stocks (TGT & WMT) last week is an ominous sign market mood has turned slightly more negative amid the Federal Reserve's most aggressive tightening spree in decades.