U.S. stock index futures fell on Tuesday as a weak forecast from Snap Inc hit shares of social media companies, a day after Wall Street enjoyed a relief rally.
"Snap's warning has triggered fears that advertising spend has peaked for now," Russ Mould, investment director at AJ Bell, said.
"When the (economic) outlook is gloomier, advertising spend is pared back. This will put investors in a bad mood and create more storm clouds just at the point when many were hoping the market slump was close to bottoming out."
Market Snapshot
At 07:47 a.m. ET, Dow e-minis were down 200 points, or 0.63%, S&P 500 e-minis were down 41 points, or 1.03%, and Nasdaq 100 e-minis were down 193 points, or 1.6%.
Pre-Market Movers
Snap(SNAP) – Snap plummeted 30% in the premarket after the social media company issued a profit warning and said it would slow hiring. The Snapchat parent said it is dealing with a number of issues, including inflation, an uncertain economic environment andApple’s(AAPL) privacy policy changes. Snap’s warning is weighing on other social media stocks like Meta Platforms(FB), which is down 7.5%, Twitter(TWTR), off 3.4%, and Pinterest(PINS), down 13.5%.
Best Buy (BBY) – Best Buy jumped 2% in the premarket after the electronics retailer reported a mixed quarter. Best Buy fell 4 cents a share shy of forecasts, with quarterly earnings of $1.57 per share. Revenue was better than expected, however, and comparable-store sales did not fall as much as analysts had anticipated. Best Buy trimmed its full-year outlook based on worsening macroeconomic conditions.
Zoom Video(ZM) – Zoom rose 3.5% in premarket trading after the videoconferencing company reported better-than-expected quarterly earnings and raised its profit outlook. Demand for Zoom’s flagship videoconferencing services is waning as people return to offices, but Zoom is shifting its emphasis to products aimed at the hybrid workplace.
AutoZone(AZO) – The auto parts retailer earned $29.03 per share for its fiscal third quarter, beating the consensus estimate of $26.05 a share. Revenue topped forecasts, and comparable-store sales posted an unexpected gain. Shares gained 1.4% in premarket trading.
Abercrombie & Fitch(ANF) – The apparel retailer’s stock plunged 21% in the premarket after the company reported an unexpected quarterly loss, despite better-than-expected revenue. Abercrombie was hit by higher costs, which it expects to remain a headwind for the rest of the year. The company also its full-year outlook.
Petco(WOOF) – Petco jumped 4.2% in premarket action after beating top- and bottom-line estimates for its latest quarter, as well as better-than-expected comparable-store sales for the pet products retailer.
VMWare(VMW) – Broadcom’s(AVGO) reported takeover talks with the cloud computing company are centered on a value of about $60 billion, or about $140 per share in cash and stock, according to people familiar with the matter who spoke to The Wall Street Journal. VMWare rose 1% in the premarket.
Insulet(PODD) – Insulet rallied 11.1% in premarket trading following a Bloomberg report that the medical device maker was in talks to be acquired by Dexcom(DXCM), a maker of glucose monitoring systems. Dexcom slid 8.9% in premarket action.
Advance Auto Parts(AAP) – Advance Auto shares sank 3.4% in premarket trading after the auto parts retailer reported quarterly profit and revenue that fell slightly short of Wall Street forecasts. The company also projected full-year comparable sales that are below consensus.