Corporate profit fears shaking market

Starkly chilly projections prompt Snapchat, Meta, Google sell-offs

NEW YORK — Stocks on Wall Street gave up more ground Tuesday amid mounting worries that persistently high inflation will dim corporate profits.

The S&P 500 fell 0.8 percent, while the Nasdaq dropped 2.3 percent. The Dow Jones Industrial Average eked out a 0.2 percent gain, thank’s primarily to big gains for Mcdonald’s and Unitedhealth.

Big technology and communications companies helped weigh down the broader market, though some of the selling eased by late afternoon.

A stark profit warning from Snapchat’s parent company spooked investors into dumping the stocks of major social media companies. Snap plummeted 43.1 percent, its biggest single-day drop ever, while

Facebook’s parent, Meta, slumped 7.6 percent. Google’s parent fell 5.1 percent.

Technology and communications stocks, with their lofty values, tend to have an outsize influence on the market. The sectors have been responsible for much of the volatility the market has seen recently as well as the broad decline the major indexes have seen since early April as investors worry about the impact of rising inflation on businesses and consumers.

The pullback undercut a broad rally a day earlier, the latest example of how volatile trading has been during the market’s swoon this year.

“Just given how much uncertainty there is, people are still having a difficult time finding that one or maybe two catalysts that give them enough confidence to take on risk assets,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

The S&P 500 fell 32.27 points to 3,941.48. The

Dow gained 48.38 points to 31,928.62, and the Nasdaq slid 270.83 points to 11,264.45.

Smaller company stocks also fell. The Russell 2000 dropped 27.94 points, or

1.6 percent, to 1,764.83.

The pile of concerns weighing on the market has pushed the benchmark S&P 500 to the brink of a bear market, which is when an index falls 20 percent from its most recent record high. It is down roughly 18 percent from its record high set earlier this year.

Inflation has been weighing on a wide range of industries in the form of higher raw materials costs and more costly labor.

Many businesses have been raising prices on everything from food to clothing to offset the impact of higher costs, but the pressure has been increasing.