Shares of Pinterest (PINS 1.29%) spiked today on seemingly no company-specific news. Instead, it appears that investors are rushing back to the stock following its massive sell-off yesterday. Some comments and a bleak economic outlook from fellow technology company Snap sent social media and tech stocks tumbling yesterday.
But Pinterest was rebounding on Wednesday and was up by 8.1% as of 11:43 a.m. ET.
On Tuesday, the social media company Snap lowered its earnings and revenue estimates for its second quarter as its CEO Evan Spiegel said that "the macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month."
Spiegel's comments sent his company's share price down 42% for the day and caused many social media and tech stocks to tumble along with it.
Investors were worried that digital advertising spending could dry up as companies grow increasingly concerned that there could be an economic slowdown in the U.S. amid rising inflation and the Federal Reserve raising interest rates.
Those fears sent Pinterest's stock plunging 22% yesterday.
But some investors are returning to Pinterest today, likely since they view the recent sell-off as a new buying opportunity.
Pinterest's share-price drop yesterday and subsequent rise today is a good example of just how volatile technology stocks are right now.
Investors are trying to determine how inflation (at a nearly 40-year high) and the Federal Reserve's interest rate hikes in response to it will affect the broader economy.
High-growth stocks have suffered the biggest blows as investors worry about an economic slowdown, and Pinterest's stock hasn't escaped the pain, falling 55% over the past six months.
So while today's price bounce is surely welcomed by Pinterest shareholders, investors should expect more volatility from Pinterest and other tech stocks in the short term.