U.S. stocks fell on Thursday as investors’ renewed optimism on big tech names, driven by a slew of strong earnings, took a turn down after Facebook-parent Meta Platforms reported disappointing quarterly results.
The Dow Jones Industrials rolled into the pit 518.17 points, or 1.5%, to adjourn Thursday at 35,111.16.
The S&P 500 dropped 111.94 points, or 2.4%, to 4,477.44, for its worst day in nearly a year.
The NASDAQ cratered 538.73 points, or 3.7%, to 13,878.82, for its worst day since Sept. 2020.
Meta Platforms shares plunged more than 26.4% after the company’s quarterly profit fell short of expectations. The company also issued weaker-than-expected revenue guidance for the current quarter. It was the biggest drop ever for the Facebook parent.
Other social media names followed Meta lower on Thursday. Snap shares slid 23.6% and Twitter dropped 5.5%.
Thursday’s declines come after the major averages notched a four-day win streak during the regular session Wednesday, led by Google parent Alphabet. Investors bought the dip in tech stocks after shedding their positions throughout January as they braced for potential rate hikes from the Federal Reserve.
Strong earnings from Microsoft, Apple and Alphabet drove investors back into tech, reminding them that fundamentals are still strong, but Meta Platforms’ weak guidance has caused some to reverse course.
Spotify, meanwhile, fell 16.7% after the company’s latest quarterly figures showed a slowdown in premium subscriber growth. Pinterest faltered 10.3% while Amazon lost 7.8%. Both will both report earnings after the closing bell.
Outside of tech, Dow component Honeywell’s shares fell 7.6% after the company beat narrowly on profit but fell short on revenue and provided lower-than-expected guidance.
On the economic data front, U.S. jobless claims came in at 238,000 for the week ending Jan. 29, the Labor Department reported Thursday. Economists polled by Dow Jones expect initial claims to have fallen to 245,000 from 260,000 the week before.
Those numbers followed the release of ADP’s surprisingly downbeat private payrolls data Wednesday. Investors are still looking forward to Friday’s release of non-farm payrolls data. Consensus estimates see a gain of 150,000 jobs, according to Dow Jones, but Wall Street forecasters say the actual tally will be far lower, with one estimating a loss of 400,000 jobs in January.
Prices for 10-year Treasurys sagged, raising yields to 1.83% from Wednesday’s 1.77%. Treasury prices and yields move in opposite directions.
Oil prices regained $1.81 to $90.07 U.S. a barrel.
Gold prices subtracted $3.50 to $1,806.80 U.S. an ounce.