What happened

Shares of Zoom Video Communications (ZM 0.81%) are falling today, down by 6.5% as of 12:55 p.m. ET, compared to a 2% slump in the S&P 500. The video communication specialist's stock is closing in on a brutal year, with shares down 64% since the start of 2022.

Thursday's decline was powered by growing fears on Wall Street about Federal Reserve actions potentially sparking a recession over the next few quarters.

So what

The biggest factor pushing Zoom's shares lower on Thursday was a nearly 3% drop in the Nasdaq Composite index, home to many of its fellow tech stocks. Investors are worried that the Federal Reserve's attempts to combat inflation by raising interest rates will lead to weaker economic growth in 2023.

The Fed is aiming to cool demand in the labor market and other red-hot industries through rate increases, ideally by just enough to slow price increases without causing a wider recession.

Investors on Thursday became more worried about further rate hikes ahead, and that drove Zoom stock lower along with the wider Nasdaq.

The video communications specialist has already seen its growth rate slow to single digits in 2022 as consumers pull back spending on areas they had previously prioritized. Wall Street is concerned that the slowdown might accelerate in the year to come.

Now what

Zoom is leaning more heavily on its enterprise segment, which is expanding at a solid rate and offsetting losses in its consumer unit. Executives are also hoping to fill out the product portfolio by pushing into complementary areas like AI chat and internet telephony.

Watch metrics like sales growth, average contract size, and renewal rates for signs of success in these areas.

Meanwhile, shareholders can expect Zoom's stock to stay volatile for the foreseeable future. Investors' short-term economic growth projections are shifting rapidly right now due to the uncertain economic outlook. Those shifts mean big price swings for growth-focused tech stocks like Zoom.