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STORY: Shares in social giant Snap slumped almost 40% at the open on Tuesday (May 24).

That after a profit warning from the Snapchat owner the day before.

Snap forecast it would miss quarterly revenue and profits targets it set just a month earlier.

It blamed a faster-than-expected downturn in the economy.

Snap faces pressure from inflation, labor shortages and rising interest rates - all of which have led to fears about a global economic slowdown.

Analysts said the company also faced tough competition from TikTok and a shift in ad budgets at Google and Facebook.

Market watchers said Snap's outlook for core profit implied expenses will outpace revenue growth in the period.

Snap's share slump meant the company was on course to lose more than $14 billion from its market value.

Large players like Facebook-owner Meta Platforms and Google-parent Alphabet were both also sharply down.

A Bank of America fund managers survey for May showed investors appeared to have become more bearish on tech stocks after a bullish 14 years.

Allocation to tech has also dropped month over month by 23 percentage points, according to the survey.