By Emily Bary
Meta Platforms Inc. led a sharp turn lower in social-media stocks Tuesday after the consumer-price index unexpectedly moved higher during August, with continuing inflation reigniting fears of a pullback in online advertising.
Shares of the Facebook parent company fell 9.4% Tuesday, their worst day since Feb. 3, amid broad declines for U.S. stocks, particularly tech names — the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.69% fell 633 points, or 5.2%. Meta’s /zigman2/quotes/205064656/composite META -0.59% stock closed Tuesday at $153.13, its lowest level since March 23, 2020, according to Dow Jones Market Data. If the stock were to finish a session lower than $146.01, it would officially wipe out all of its pandemic-era gains.
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Other social-media names fell sharply as well, including Snap Inc. /zigman2/quotes/205087158/composite SNAP 0.00% , off 7%, and Pinterest Inc. /zigman2/quotes/211319641/composite PINS -1.15% , down 4.3%. Ad-dependent Alphabet Inc. /zigman2/quotes/205453964/composite GOOG -1.56% /zigman2/quotes/202490156/lastsale GOOGL -1.56% , which runs the YouTube platform and the Google suite of services, slipped 5.9%.
Meta and its social-media peers have been on a rocky ride this year amid concerns about the impacts of inflation and other economic challenges on advertiser activity. The company logged its first-ever year-over-year drop in revenue during the June quarter, with executives saying they expected broad effects on the advertising business and planned to cut costs given the climate.
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Despite jitters about the advertising industry, payment-technology companies have indicated that spending remains strong, even if consumer confidence is pressured.
“Consumer spending has been remarkably stable,” Visa Inc.’s /zigman2/quotes/203660239/composite V -1.68% chief financial officer said at a Monday conference . Separately, Mastercard Inc. /zigman2/quotes/207581792/composite MA -1.51% released spending data showing 11.7% year-over-year growth in August retail sales exclusive of autos.
The social-media stock bucking Tuesday’s trends was Twitter Inc. , but that stock’s immediate future is less tied up in ad-industry dynamics given the company’s merger saga with Tesla Inc. /zigman2/quotes/203558040/lastsale TSLA -3.73% Chief Executive Elon Musk. Musk is seeking to terminate his $44 billion deal for the company and a judge will rule on the situation in October, but Twitter scored a win in its favor Tuesday as it said that shareholders had voted to approve the acquisition .
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Twitter must still take the matter to court, but investors seem to feel incrementally positive as Twitter shares rose 0.8% in Tuesday’s tough market action. Twitter was the second-best performer in the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.31% Tuesday, behind only agricultural company Corteva Inc. /zigman2/quotes/212512039/composite CTVA +0.41%
Shares of Meta have slid 54% over the course of 2022, as the S&P 500 index has fallen 13.8%.