Snap Inc (NYSE:SNAP) shares are trading lower by 3.5% to $8.30 Tuesday afternoon after HSBC initiated coverage on the stock with a Reduce rating and announced a $7.50 price target.
Stocks across sectors are also falling Tuesday amid overall market weakness with concerns about future rate hikes following last Wednesday’s FOMC statement and lower-than-expected initial jobless claims data.
Why It Matters
Concerns about future rate hikes typically have a negative impact on stock prices. When the Federal Reserve signals that it may raise interest rates in the future, it makes borrowing more expensive for companies. This can lead to lower consumer spending and reduced corporate profitability.
Since Snap is a technology company, it might be particularly sensitive to changes in interest rates, as it relies on innovation and growth, which can be hindered by higher borrowing costs.
What’s Going On?
The Federal Reserve last week maintained the federal funds rate within the 5.25% to 5.5% range at its September meeting in a unanimous move.
The September dot plot reveals the median preference for the fed funds rate at the close of 2023 remains unwavering at 5.6%. This figure mirrors projections made back in June, hinting at the possibility of one more rate hike during either of the last two meetings this year…Read More
According to data from Benzinga Pro, SNAP has a 52-week high of $13.89 and a 52-week low of $7.33.
