Stocks fell in morning trading on Wall Street Thursday as Facebook parent company Meta plunged 24.5%, erasing more than $220 billion in market value, the largest drop in history.
Meta’s lofty stock price, as with several other big communications and technology companies, has an outsize influence on markets. That means a big swing in either direction for such a company can do much to sink or lift the broader market.
The S&P 500 index fell 1.4% as of 10:03 a.m. Eastern and the tech-heavy Nasdaq fell 2.3%. The Dow Jones Industrial Average fell 275 points, or 0.8%, to 35,353.
Meta sank after forecasting revenue well below analysts’ expectations for the current quarter, a disappointment for a company that investors have become accustomed to delivering spectacular growth. It also reported a rare decline in profit due to a sharp increase in expenses.
The steep drop weighed on fellow social media company Twitter, which shed 6.1%. Snapchat’s parent company Snap sank 18.6%.
Communications and technology stocks had some of the biggest losses, though the slump was spread out through other sectors. Retailers and industrial companies also fell.
The yield on the 10-year Treasury note, which is used as a benchmark to set interest rates on mortgages and many other kinds of loans, rose sharply, to 1.84% from 1.76% late Wednesday.
Investors also had their eyes on monetary policy updates in Europe. The Bank of England raised interest rates for the second time in three months on Thursday, putting the United Kingdom far ahead of the rest of Europe and the U.S. in moving to tame surging inflation that is squeezing consumers and businesses.
In contrast, the European Central Bank doesn’t plan to raise rates until 2023 despite record inflation, blaming it on temporary factors. But it has decided the economic recovery is strong enough to start carefully dialing back some of its stimulus efforts over the next year.
The losses on Wall Street threaten to end a run of solid daily gains for the major indexes this week, though they are still on track for weekly gains.
Investors had several earnings reports to review, with mixed outcomes for stocks. Wireless carrier T-Mobile rose 9% after reporting strong results. Health insurer Humana rose 5.8% and upscale clothing company Ralph Lauren rose 4.4% after also reporting encouraging financial results.