Meta Platforms Inc. led a sharp turn lower in social-media stocks Tuesday after the consumer-price index unexpectedly moved higher during August, with continuing inflation reigniting fears of a pullback in online advertising.
Shares of the Facebook parent company fell 9.4% Tuesday, their worst day since Feb. 3, amid broad declines for U.S. stocks, particularly tech names — the Nasdaq Composite Index
fell 633 points, or 5.2%. Meta’s
stock closed Tuesday at $153.13, its lowest level since March 23, 2020, according to Dow Jones Market Data. If the stock were to finish a session lower than $146.01, it would officially wipe out all of its pandemic-era gains.
See more: Dow books near 1,300-point drop as stocks record worst day since June 2020
Other social-media names fell sharply as well, including Snap Inc.
off 7%, and Pinterest Inc.
down 4.3%. Ad-dependent Alphabet Inc.
which runs the YouTube platform and the Google suite of services, slipped 5.9%.
Meta and its social-media peers have been on a rocky ride this year amid concerns about the impacts of inflation and other economic challenges on advertiser activity. The company logged its first-ever year-over-year drop in revenue during the June quarter, with executives saying they expected broad effects on the advertising business and planned to cut costs given the climate.
Read: Meta is one of today’s worst S&P 500 performers, but these 5 other stocks have lost $387 billion in value
Despite jitters about the advertising industry, payment-technology companies have indicated that spending remains strong, even if consumer confidence is pressured.
“Consumer spending has been remarkably stable,” Visa Inc.’s
chief financial officer said at a Monday conference. Separately, Mastercard Inc.
released spending data showing 11.7% year-over-year growth in August retail sales exclusive of autos.
The social-media stock bucking Tuesday’s trends was Twitter Inc.
but that stock’s immediate future is less tied up in ad-industry dynamics given the company’s merger saga with Tesla Inc.
Chief Executive Elon Musk. Musk is seeking to terminate his $44 billion deal for the company and a judge will rule on the situation in October, but Twitter scored a win in its favor Tuesday as it said that shareholders had voted to approve the acquisition.
Don’t miss: Twitter whistleblower tells Congress the company was ’10 years behind’ industry security standards
Twitter must still take the matter to court, but investors seem to feel incrementally positive as Twitter shares rose 0.8% in Tuesday’s tough market action. Twitter was the second-best performer in the S&P 500
Tuesday, behind only agricultural company Corteva Inc.
Shares of Meta have slid 54% over the course of 2022, as the S&P 500 index has fallen 13.8%.