The news spurred widespread selling across the advertising and ad-tech space. Among notable decliners, Trade Desk Inc. sank 20%, fuboTV Inc. lost 8%, Magnite Inc. lost 14%, LiveRamp Holdings Inc. slid 9%, Roku Inc. dropped 17%, and Vizio Holding Corp. was down 8.1%. In addition, Omnicom Group Inc. fell 6.4% and Interpublic Group of Cos lost 4.9%.

“At this point, our sense is this is more macro and industry-driven versus Snap specific,” Piper Sandler analyst Tom Champion wrote in a note.

Others on Wall Street agreed, with Citi analyst Ronald Josey saying “a slowing macro is likely impacting advertising results across the broader Internet sector, although we believe platforms more exposed to brand advertising—like Twitter, Google’s YouTube, and Pinterest—are likely experiencing a greater impact overall.”

The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won’t meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment.

Snap Sinks on Shock Forecast Cut, Weighing on Peers: Street Wrap

Snap and platforms like Facebook and Google are competing for advertising dollars at a challenging time. Spiraling inflation is putting pressure on companies and consumer spending, while recent privacy changes, such as Apple Inc.’s tracking restrictions, have slowed businesses that were booming during much of the pandemic.

User growth is another a big focus for social media firms as they vie to attract new customers to target ads in an already saturated market. In February, Facebook-parent Meta posted the biggest one-day wipeout in market value for any U.S. company ever after saying that user additions stalled.

And broader concerns for the tech sector have also been hitting social media stocks, with the Federal Reserve’s path of rate hikes particularly weighing on technology stocks that are valued on future growth expectations.

Nasdaq 100 Index declined more than 3.4% on Tuesday, set to reverse Monday’s advance for the gauge. The tech-heavy index is down 29% this year, wiping out several hundred billions in value from the likes of Apple to other so-called growth peers like Netflix Inc.