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Meta (FB) Slump Stirs Massive Reversal in Stock Market’s 4-Day Bull Run

UTC by Benjamin Godfrey · 3 min read
Meta (FB) Slump Stirs Massive Reversal in Stock Market’s 4-Day Bull Run
Photo: NYSE / Twitter

While investors are looking to brace up for any potential interest rate hike in the future, dependence on earnings and Wall Street performance is what most stocks need to recoup all losses accrued in January.

The unprecedented rout in the shares of Meta Platforms Inc (NASDAQ: FB) caused a massive retracement in the 4-day winning streak of the United States stock market.

The S&P 500 Index (INDEXSP: .INX) which soared 0.94% on Wednesday recorded a 2.44% slump on Thursday, shedding 111 points to 4,477.44 in what turned out to be the worst day for the broad index in 12 months. The Dow Jones Industrial Average (INDEXDJX: .DJI) also slumped 1.45%, dropping 518 points to 35,111.16. The Nasdaq Composite (INDEXNASDAQ: .IXIC) was also badly hit, recording its worst day since September 2020 as it closed Thursday’s session down 3.74% to 13,878.82. The tech-heavy benchmark was the worst loser with 538 points shed off.

The market has been pricing very well all week long and the single-day rout reversed the trend as Meta Platforms reported an earnings miss and also provided doubtful guidance for the current quarter. The tech giant’s stock dropped by a massive 19.57% to $237.76 per share.

“Facebook is a confidence builder,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It’s a super widely held stock and a core part of many portfolios, so when it has such a difficult time, it just shakes overall confidence. The question right now is, is this a Meta-specific issue, or is this going to be an overall issue?”

The stock market-induced drag by FB also rubbed on most big tech including social media stocks. While Snap Inc (NYSE: SNAP) lost 23.60% to $24.50, Amazon.com Inc (NASDAQ: AMZN) closed Thursday’s session down 7.81% to $2,776.91. In a very dramatic twist, both Snap and Amazon did not stay down in the mud for long as the stocks have rebounded in the After Hours trading.

Snap is trading in the positive territory at the time of writing after gaining a massive 59.18% to $39 per share. Amazon has also inked a 14.24% in the After Hours session to reprice at $3,172.25 after releasing a better-than-expected earnings report on Thursday.

Meta Stock and the Earnings Beat Expectation

While investors are looking to brace up for any potential interest rate hike in the future, dependence on earnings and Wall Street performance is what most stocks need to recoup all losses accrued in January. However, reporting good earnings has proven not to be enough for all firms according to Kinahan who said bullish guidance has to follow each earnings report to help investors maintain confidence in potential future uncertainties.

“The problem we’re suffering from right now for earnings in general is it’s not enough to have good earnings, you have to lay out a really good plan going forward with a lot of optimism. ‘Good isn’t good enough’ is really the theme of this earnings season so far,” Kinahan said.

While Amazon has changed the narrative by rebounding from its losses, investors can only hope that other firms yet to unveil their earnings can maintain a certain level of optimism in their future guidance projection.

Business News, Market News, News, Stocks
Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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