US Stocks: Nasdaq futures slide as Snap’s ad warning knocks down social media shares

Nasdaq futures tumbled on Friday as elevated U.S. Treasury yields and Snap Inc’s forecast of no revenue growth for the busy holiday quarter rattled shares of other social media companies.

The owner of photo messaging app Snapchat lost more than a quarter of its market value in premarket trading after it also posted its slowest quarterly revenue growth in five years as advertisers cut spending due to spiraling inflation and geopolitical woes.

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“While its (Snap Inc) warning on advertising hit shares in other social media platform owners like Meta and Pinterest, it could be that the relevance of Snapchat with a fickle youthful user base is starting to wane,” said Russ Mould, investment director at AJ Bell.

The slide in mega-cap growth stocks also comes against the backdrop of the benchmark 10-year U.S. Treasury yield hitting 15-year highs on expectations of continued aggressive rate hikes by the U.S. Federal Reserve.

Markets are widely expecting a fourth 75-basis-point hike at the central bank’s November meeting.

At 7:04 a.m. ET, Dow e-minis were down 100 points, or 0.33%, S&P 500 e-minis were down 17 points, or 0.46%, and Nasdaq 100 e-minis were down 91.75 points, or 0.83%.

U.S. stocks ended lower on Thursday after comments from Philadelphia Fed President Patrick Harker added to jitters over the central bank’s rate-hiking spree and its impact on the economy.

Third-quarter reporting season so far has been better-than-feared, prompting analysts to nudge their earnings expectations for S&P 500 companies to a 3.1% increase from 2.8% earlier in the week, according to Refinitiv data.

It is still well below the 11.1% rise that was forecast at the start of July.

American Express said its third-quarter profit had modestly improved, however shares of the company were down 3%.