What happened 

Shares of Snowflake (SNOW -5.09%), a cloud-based data platform company, tumbled last month, seemingly on no company-specific news. Instead, investors were likely reacting to a broader market sell-off, rising inflation, and an upcoming Federal Reserve interest rate hike.

Those concerns helped send Snowflake's stock down 25.2% last month, according to data provided by S&P Global Market Intelligence

So what 

Investors were a bit jittery in April as they anticipated that the Federal Reserve would raise the federal funds rate at the beginning of May. Fed Chairman Jerome Powell said that a hike of 50 basis points was on the table for the May meeting, which signaled to investors that the Federal Reserve is getting serious about tamping down inflation.

Someone pointing to a stock chart on a computer.

Image source: Getty Images

Inflation has reached a 40-year high in the U.S., and investors have been concerned that aggressive moves by the Fed will end up significantly slowing down the economy. 

That led to investors fleeing stocks in April, with the S&P 500 falling nearly 9% and the tech-heavy Nasdaq Composite pulling back 13%.  

Tech companies, including Snowflake, suffered some of the worst losses because many of them are high-growth stocks. If inflation keeps rising and upcoming interest rate hikes slow the economy, then high-growth companies won't be able to boost sales as easily as they have in the recent past.

Now what 

The Fed did indeed hike interest rates by 50 basis points at its meeting earlier this month, and it indicated that it could do the same several times throughout this year. 

That's continued to put Snowflake investors on edge, and it's why its share price has fallen an additional 16% so far this month. 

Snowflake could still end up being a good long-term investment, but shareholders should prepare for more market uncertainty. Investors will get a clearer picture of how Snowflake is doing when the company reports its first-quarter results on May 25.