A lackluster trading persisted on the stock market anew on Wednesday, with the three major indices finishing mixed, as investors digested news of the US economy’s contraction in the first quarter of the year, triggering fears of recession.
Among all major indices, only the Dow Jones and S&P 500 ended in the green, up 0.35 percent and 0.15 percent, respectively. In contrast, the tech-heavy Nasdaq dipped by 0.09 percent.
Ten companies also mirrored the wider market downturn, predominantly due to dismal earnings performance and tempered growth outlook for the remainder of the year.
In this article, we have named 10 of the worst-performing stocks on Wednesday and detailed the reasons behind their drop.
To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume.
A stock market chart. Photo by Arturo A on Pexels
10. Reddit Inc. (NYSE:RDDT)
Reddit snapped a six-day winning streak on Wednesday, losing 4.56 percent to close at $116.57 apiece as investors resorted to profit-taking while digesting an investment firm’s price target downgrade on its stock.
On Tuesday, analysts from Bernstein lowered their price target for Reddit Inc. (NYSE:RDDT) by 27 percent to $110 from $150 previously and maintained their underperform rating on the shares.
According to the analysts, the adjustment was based on concerns about the declining app downloads during the first quarter of the year, albeit the figure saw a pickup in April.
Additionally, the traffic originating from Google has tapered off year-to-date, including after another algorithm update from the search engine giant towards the end of April.
Apart from Bernstein, Reddit Inc. (NYSE:RDDT) also earned a lower price target from Deutsche Bank, at $180 versus $235 previously.
Reddit Inc. (NYSE:RDDT) is set to announce the results of its first quarter earnings performance on Thursday, May 1, 2025.
9. Etsy, Inc. (NASDAQ:ETSY)
Etsy dropped its share prices by 5.74 percent on Wednesday to finish at $43.48 apiece as investors soured on the company’s financial performance for the first quarter of the year.
In its earnings release, Etsy, Inc. (NASDAQ:ETSY) said it swung to a net loss of $52 million from a $63 million net profit in the same period a year earlier, reflecting an impairment charge of $101.7 million to the goodwill of Reverb.
Revenues, on the other hand, ended flat at $651 million, but were driven by significant growth in on-site advertising revenue for both Etsy and Depop, a full quarter impact of the seller set-up fee, and continued benefit from Payments expansion.
Further weighing down on the sentiment was a notable decline in the number of active buyers year-on-year, down 3.4 percent to 88.5 million.
“We are keeping a clear eye on Etsy’s long-term opportunities, while also staying nimble in the face of uncertainty given recent tariff announcements and the fluid state of consumer confidence in our core markets,” said ETSY Chief Financial Officer Lanny Baker.
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