The stock market didn't do much on Wednesday morning, giving up early gains to trade near the unchanged mark. Investors have no confidence that lawmakers in Washington will figure out a way to work with the White House toward reaching a compromise on an economic stimulus package in the near future, and that uncertainty has some market participants on edge. Shortly before 11:15 a.m. EDT, the Dow Jones Industrial Average (^DJI -0.88%) was down 32 points to 28,276. The S&P 500 (^GSPC -1.66%) had fallen 1 point to 3,442, and the Nasdaq Composite (^IXIC -2.63%) had given up 6 points to 11,510.

Yet there were some bright spots within the market. In particular, social media stocks performed quite well, as the latest earnings results from Snapchat parent company Snap (SNAP -3.21%) suggested that some aspects of the business are starting to improve. That has investors excited about the prospects for image-centered social media player Pinterest (PINS -3.90%), which reports its latest results next week.

Five people against a brick wall looking at various mobile devices.

Image source: Getty Images.

Snapping up shares

Shares of Snap soared 33% Wednesday morning. The move pushed the stock to an all-time high, surpassing even the short-lived levels it reached immediately after its IPO in 2017.

Snap's third-quarter financial report had some unexpectedly positive news for the Snapchat owner. Daily active user counts grew again, rising 18% year over year to 249 million. But the big news was on the top line, where revenue soared 52% from year-ago levels.

Snap cited several reasons for the boom. The company strengthened its advertising platform with initiatives like a virtual experience, powered by augmented reality, that allows users to "try on" apparel and footwear. Greater investment in high-quality content and camera technology also contributed, as did efforts to launch new features that resonate with users in the Snapchat community.

It's no surprise that Snap managed to attract more users, given the ongoing pressures from the coronavirus pandemic on in-person contact and the growing importance that social media sites have in keeping people connected safely. But the positive response from advertisers wasn't entirely expected, and that bodes well for Snap's business.

Stick a pin in it

Pinterest also enjoyed a big rise, climbing 10%. Several players in the broader social media industry saw sizable gains, but Pinterest in particular seemed to benefit from stronger advertising interest.

Pinterest is in a unique situation right now. Thus far, it hasn't monetized its platform to nearly the extent that Snap and other social media companies have, instead emphasizing the positive relationships among its dedicated user base. But signs of strength three months ago have investors excited about the momentum that Pinterest could generate.

Shareholders will find out more about Pinterest when it releases its earnings on Oct. 28. They'll hope to see bigger revenue gains than the 4% year-over-year jump that the company reported in the second quarter of 2020, and they'll want to see not only strong user counts but also favorable trends on average revenue per user.

As long as Pinterest's results are consistent with the positive message Snap sent investors in its latest earnings report, then the social media stock  could have further room to run higher. After such big gains so far in 2020, however, any disappointment could lead to a big reversal of fortune for Pinterest shares.