- Global stocks fell Tuesday, with US futures setting up a retreat from the previous day's sizzling rally.
- Snap fell as much as 28% premarket, after its CEO warned of a "challenging macroeconomic environment".
- The euro rose after ECB chief Christine Lagarde said eurozone interest rates are "at a turning point."
Global stocks fell Tuesday, with US futures setting up a retreat from the previous day's sizzling rally, as investors continued to fret about an economic slowdown.
Meanwhile, the euro rebounded against the dollar after European Central Bank President Christine Lagarde said eurozone interest rates are "at a turning point."
Futures for the S&P 500 fell 1.03%, while Dow Jones futures slid 0.66%, after surging Monday as investors digested the first-quarter earnings season results. Futures on the tech-heavy Nasdaq lost 1.62%, leading the way as all major US indices were weighed down by a sharp fall in social-media platform Snap's stock after a profit warning late Monday.
Investors' fears about an economic slowdown were fanned by a warning by Snap's CEO about a "challenging macroeconomic environment" that would hit hiring and revenue growth for the rest of the year. The stock plunged as much as 28% in Tuesday's premarket in the wake of his comments.
"Snap spooked the market with a macroeconomic warning that dented tech the most and pointed to earnings revisions that could drag the market lower for longer," said Neil Wilson, chief market analyst at Markets.com. "The company not only warned that it would miss revenue and earnings estimates, but became the latest to say it would slow hiring."
Equities worldwide dropped, with the MSCI All-World falling 0.34% as growth concerns took hold.
Europe's Stoxx 600 slipped 0.72%, with the UK's FTSE 100 down 0.20%. Germany's DAX slid 0.82%, and the French CAC 40 slipped 0.92%, as eurozone business growth slowed in May thanks to a shortage of raw materials, according to preliminary Purchasing Managers Index data.
ECB boss Lagarde said Tuesday the central bank is "at a turning point" in its monetary policy, but stressed there was no need for it to rush to raise rates or withdraw economic support. Her comments, which built on her forecast that the ECB is looking to hike rates this year, helped push the euro to one-month highs against the dollar.
"The economic data out of the eurozone continues to show that there is no reason for the ECB not to begin the process of increasing the interest rate. It is time for the negative interest rate period to end," Naeem Aslam, chief market analyst at Avatrade, said.
Asian stocks closed lower, as new Chinese measures to support the economy failed to dampen worries about the impact of Beijing's COVID-zero policy of strict curbs to contain the virus. The Shanghai Composite Index fell 2.41%, while Hong Kong's Hang Seng Index dropped 1.75%. Japan's Nikkei 225 was down 0.94%.
Oil futures dipped as concerns over China's curbs and the prospect of recessions worldwide outweighed hopes for a pick-up in demand during the US summer driving season and ongoing tight supply. Brent crude was 0.13% lower at $113.27, while WTI crude changed hands at $110.15, down 0.14%.