What's going on?

Snap�s stock plunged below its listing price this week, after the social media company warned it�ll miss both its revenue and profit estimates.

What does this mean?

Snap already disappointed investors with a bleak quarterly results update last month, in which it predicted weaker-than-expected revenue growth this quarter of 20-25%. But the company just admitted that it�ll probably miss even those targets, warning that the economic backdrop has deteriorated further and faster than it had previously expected. Snap said supply chain shortages and workforce disruptions were hitting advertisers� spending, and that it�d be putting its hiring plans on hold for the rest of this year to cut back on costs. Investors took it badly: they sent Snap�s stock down as much as 41% on Tuesday � the company�s biggest-ever intraday decline.

Why should I care?

For markets: This isn�t just about Snap.
Snap�s warning doesn�t bode well for other ad-reliant companies, as they all compete for an increasingly small pool of cash. In fact, analysts are taking it as a sign that the entire industry is set to slow down, which might be why social media stocks � including those of Meta, Alphabet, Twitter, and Pinterest � collectively lost more than $160 billion in market value on Tuesday.

The bigger picture: The stock market is growling.
Those tech names represent a substantial portion of the US stock market, so it�s no surprise that their dropoffs helped drag the entire thing down on Tuesday. It�s now fallen 19% this year, which puts it within a hair�s breadth of a technical bear market at the 20% mark. And investors don�t think it�ll stop there: survey data out this week shows they’re on average expecting it to fall at least another 10% before it bottoms.