Wall Street stocks tumbled early Tuesday, resuming a downward trend following weak Snap results and downgraded forecasts for the Chinese economy.
After slumping for much of 2022, stocks enjoyed a rare positive session on Monday, with major indices up more than 1.5 percent.
But markets were back on the defensive again early Tuesday after both UBS Group and JPMorgan Chase cut their China economic growth forecasts due to the impact of Beijing’s restrictive coronavirus strategy.
Analysts also cited Snap’s warning late Monday that key financial benchmarks would lag earlier estimates.
The results reflect that “the macroeconomic environment has deteriorated further and faster than expected,” said Snap, which plunged nearly 40 percent early Tuesday.
About 15 minutes into trading, the Dow Jones Industrial Average was down 0.5 percent at 31,736.08.
The broad-based S&P 500 fell 1.3 percent to 3,921.04, while the tech-rich Nasdaq Composite Index fell 2.6 percent to 11,231.80.
Addressing the warning from Snap, Briefing.com analyst Patrick O’Hare noted that some investors believe “these types of earnings/revenues warnings are just getting started.”
“The hope for others, though, is that these warnings won’t carry as much shock value for the broader market since they effectively corroborate how the stock market has been trading to this point,” he said.
