By Liz Moyer
Investing.com -- U.S. stocks sank lower on Tuesday, weighed down by a sharp decline in shares of the social media platform Snap, which warned about its ability to meet forecasts for the second quarter because of deteriorating economic conditions.
At 10:30 AM ET the Dow Jones Industrial Average was down 401 points, or 1.3%, while the S&P 500 was down 2.1% and the NASDAQ Composite was down %.3.4
Snap Inc (NYSE:SNAP) shares sank 39% after warning Monday evening that it won't meet previously offered guidance, as the macroeconomic environment has deteriorated faster than it expected. Shares of other social media firms such as Meta Platforms Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) also dropped. The companies use digital advertising, which has been crimped since Apple (NASDAQ:AAPL) made privacy changes to its system. Like other tech companies, Snap said it would slow its hiring to control costs.
The warning raised the alarm on a possible recession, something investors have started to worry about given the Federal Reserve's posture toward interest rates. The central bank is expected to make more half-point rate hikes at its next two meetings to tame inflation, but some worry it will act so aggressively it will tip the economy into a recession.
The manufacturing purchasing managers' index for April met expectations with a 57.5 reading, while services PMI came in at 53.5, slightly lower than expected.
Abercrombie & Fitch Company (NYSE:ANF) stock fell 28% after unveiling an unexpected loss for the recent quarter. But electronics retailer Best Buy Co Inc (NYSE:BBY) stock rose more than 3% after revenue beat expectations.
Oil prices rose. Crude Oil WTI Futures was up 0.8% to $111.19 a barrel, while Brent Oil Futures crude rose 0.6% to $111.60 a barrel. Gold Futures rose 0.8% to $1,863 an ounce.