The worst sell-off in tech stocks since the fall of 2020 sent U.S. stock indices tumbling, halting a four-day rebound.

The Nasdaq 100 lost 4.2% and the S&P 500 fell 2.4% as Facebook owner Meta suffered a historic rout that erased more than $250 billion from its value.

However, the austere mood lifted somewhat late in the session after’s results pushed shares of the online retailer up 15%. The third-largest company in the S&P 500, Amazon’s market capitalization of around $1.5 trillion is more than double that of Meta. Snap Inc. also rose 30% after positive earnings.

Snapchat’s results defied the tech funk created by Facebook’s downfall. Credit:Getty

The declines came as investors also digested persistently high inflation concerns from the European Central Bank with hawkish comments from Christine Lagarde. The Euro soared along with European bond yields. US Treasuries followed the decline in the Eurozone and the dollar fell.

“We were hit with a double today with Facebook’s sharp decline and the surprising news that the ECB has become more hawkish,” said Matt Maley, chief market strategist for Miller Tabak + Co.

“The stock market had rallied in the afternoon each of the past four days, so traders were hoping that might bail us out again. When the rally failed to materialize, traders lost a lot of confidence .

Weak numbers from U.S. tech giants including Spotify Technology SA rattled investors who had bet a strong earnings season would keep stocks attractive and thwart some of their lingering worries, including monetary policy tightening. Markets have swung wildly and equities are suffering losses this year as officials cut stimulus to curb inflation.

In Europe, the Bank of England raised its key rate and announced that it would start reducing its bond holdings. Meanwhile, the ECB held interest rates steady and said net purchases under its emergency support program will end in March.

Lagarde said inflation would stay high for longer, but the bank was getting “much closer” to its inflation target. Germany’s two-year yield peaked in 2015. The Stoxx Europe 600 fell below its 100-day moving average.

“As markets focus narrowly on the monetary policy directions of major developed markets – and investor sentiment around the world shifts – data releases on economic activity will be critical,” said Marilyn Watson, Head of Global Fixed Income Fundamental Strategy at BlackRock.

Growth in the US service sector retreated in January to its slowest pace in nearly a year. Meanwhile, U.S. initial jobless claims fell more than expected last week to 238,000 ahead of payrolls data on Friday.

“Tomorrow’s jobs report is a reminder that expectations for Fed policy are the primary influence in this market right now, and if economic data, particularly inflation data, comes in ‘too hot’ , this will rekindle hawkish Fed concerns like in January, and we would expect at least a partial return to January’s volatility,” wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens” newsletter. Report.” “At the end of the day, Fed policy still matters a lot to this market.”