By Shreyashi Sanyal and Ankika Biswas
Oct 21 (Reuters) - Nasdaq futures tumbled over 1% on Friday as Snap Inc's forecast of no revenue growth in the lucrative holiday quarter sparked a selloff in social media companies, with galloping U.S. Treasury yields adding to the losses.
The owner of photo messaging app Snapchat SNAP.N lost more than a quarter of its market value in premarket trading after it posted its slowest quarterly revenue growth in five years as advertisers cut spending due to inflation and geopolitical woes.
Other companies that rely heavily on ad revenue including Alphabet Inc GOOGL.O, Twitter Inc TWTR.N, Meta Platforms Inc META.O and Pinterest Inc PINS.N fell between 1.9% and 8%.
"It's not uncommon for companies to cut back on advertising spending during concerns of an economic slowdown," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
"Right now you don't want to be in a Snap or a Meta, and it's probably going to transfer over to Alphabet."
The slide in mega-cap growth stocks also comes as the benchmark 10-year U.S. Treasury yield US10YT=RR hit 15-year highs on expectations of 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.
Shares of Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O were all down about 1% each.
"What you're really seeing is a market that's paying a little bit more attention to the yield on Treasuries and that's giving investors a little bit more of a concern," Pavlik said.
At 8:10 a.m. ET, Dow e-minis 1YMcv1 were down 180 points, or 0.59%, S&P 500 e-minis EScv1 were down 24.5 points, or 0.67%, and Nasdaq 100 e-minis NQcv1 were down 114.5 points, or 1.03%.
In the previous session, U.S. stocks ended lower 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 up 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.
Thanks to the earnings-driven gains from earlier this week, all the three main indexes are set for their best week in six.
Among Dow .DJI components, Verizon Communications Inc VZ.N shed 2.3% as its profit slid 23% and the carrier missed estimates for wireless subscriber additions.
American Express AXP.N said its third-quarter profit had modestly improved, however shares of the company were down 5.2%. Shares of Visa Inc V.N fell 1.2%.
In a bright spot, top oilfield services provider Schlumberger Ltd SLB.N rose 1.8% after it reported quarterly profit above expectations amid a surge in oil and gas prices.
(Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Additional reporting by Medha Singh and Devik Jain; Editing by Anil D'Silva and Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.