NEW YORK CITY, RAW – Wall Street snapped a four-session winning streak on Thursday, with all three benchmarks closing lower after Facebook-owner Meta Platforms’ dour forecast sent its stock plummeting and halted a nascent recovery built on upbeat earnings from other big tech.

Meta shares sank, as it blamed Apple’s privacy changes and increased competition from rivals such as TikTok for its disappointing outlook

The tech-heavy Nasdaq fell as shares of other social media companies also took a beating. Twitter Inc and Pinterest Inc dropped, and Snapchat suffered ahead of its own earnings report after the bell.

Big tech stocks such as Alphabet Inc and Microsoft Corp fell, as did Amazon.com Inc, before it was scheduled to release results.

“As we’ve gotten numbers in recent days, what we’re seeing is the delivery of earnings being rewarded or penalised, and if you continue to deliver strong earnings growth, the market will reward that,” said Maxwell Grinacoff, US equity & derivatives strategist at BNP Paribas.

“In a rising rate environment, as we progress through the year, we expect to see more divergence between the higher quality names, such as the megacaps, and lower quality names which are not making any money.”

Financial technology companies saw a second day of selling, after PayPal Holdings Inc’s disappointing earnings on Tuesday caused investors to question if these firms – which benefited significantly from the pandemic advancing the shift to digital payments – would justify steep valuations in 2022.

PayPal dropped again, as did peers Block Inc, Affirm Holdings Inc and SoFi Technologies.

Tech stocks have enjoyed a dominant period amid low interest rates, as investors sought out high growth, but with inflation rising and the US Federal Reserve signaling an aggressive rate-hike stance to rein it in, money managers are having to adjust portfolios accordingly.

“People are going to start increasing allocations to value stocks, and to do that they will have to sell their growth stocks, even if they are down 15 per cent to 30 per cent,” said Jack Murphy, chief investment officer of Easterly Investment Partners.

According to preliminary data, the S&P 500 lost 112.08 points, or 2.45 per cent, to end at 4,477.30 points, while the Nasdaq Composite lost 538.73 points, or 3.74 per cent, to 13,889.06. The Dow Jones Industrial Average .DJI> fell 518.96 points, or 1.49 per cent, to 35,110.37.

Communication services was the worst performer of the major S&P 500 sectors, weighed by Meta’s performance.

One of the few bright spots among its sector constituents was T-Mobile US Inc, which advanced after posting both positive numbers and outlook.

The CBOE volatility index, Wall Street’s fear gauge, moved up after hitting a near three-week low in the previous session.

Adding to the market’s woes was a second rate hike by the Bank of England and a hawkish pivot by the European Central Bank’s President Christine Lagarde.

Meanwhile, the number of Americans filing new claims for unemployment benefits fell more than expected last week as COVID-19 infections subsided, suggesting that an anticipated slowdown in job growth in January was likely temporary.