Shares in Facebook owner Meta fell 20% in U.S. premarket trade on Thursday after the social media giant issued a dismal forecast, blaming Apple's privacy changes and increased competition.
A man stands in front of a sign of Meta, the new name for the company formerly known as Facebook, at its headquarters in Menlo Park, California, U.S. October 28, 2021. REUTERS/Carlos Barria/File Photofell 20% in U.S. premarket trade on Thursday after the social media giant issued a dismal forecast, blaming Apple's privacy changes and increased competition.
The shock drop, which comes before Amazon earnings later in the day, spilled over to Europe where technology led sectoral fallers with a decline of 2% and soured the mood across global financial markets in another busy day of central bank meetings. Big U.S. tech has come under mounting pressure in 2022 as investors expect policy tightening at the U.S. Federal Reserve to erode the industry's rich valuations following years of ultra-low interest rates. NasdaqRegister now for FREE unlimited access to Reuters.com"The downgrade in the earnings outlook by Meta and other companies took markets by surprise," said Kenneth Broux, a strategist at Societe Generale in London.
"The tech selloff spilled over to broader equity markets this morning and with the Fed preparing to raise interest rates, we could see more volatility going forward."
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