Photo by Visual Stories || Micheile on Unsplash

Further selling plagued the regular trading session again Thursday, sending us on another downward trend for the week. The headlines across news sources all week have been the ratcheting tensions on the border of Ukraine, which President Biden said he “feels” will bring about a Russian invasion in the next few days. But there are other factors in play here, as well.

First, the numbers: the Dow endured its worst trading day of 2022 today, falling -622 points (though off the -668 points at session low) or -1.78%. The Nasdaq, now back to -15% from its November highs, was -2.88% on the day, while the S&P 500 was -2.12%. The small-cap Russell 2000 dropped much of its recent gains, -2.46% on the day.

The Nasdaq drop, especially relative to the Dow and S&P, suggests that it’s not just the Ukraine crisis weighing on the markets: there is a valuation compression currently squeezing even top-notch growth companies — NVIDIA (NVDA), for instance, after another strong beat-and-raise quarter yesterday, lost -7.5% Thursday. Walmart (WMT) , on the other hand — flat year over year and -4% year-to-date — grew +4% in an otherwise dismal trading day.

Basically, investors are re-framing what they expect to get from the current market environment, and to an extent this makes sense even if we subtract the Ukraine tensions. That’s because, as the Fed is now expected to raise interest rates a half-point in mid-March (with as many as six additional quarter-point hikes between now and the end of the year) and drain the balance sheet of $9 trillion starting ASAP, market participants now recognize we are now in a very different trading environment, and they are willing to take some air out of even some of the most promising growth names.

And the earnings reports continue: Dropbox (DBX) reported top- and bottom-line beats in its Q4: 41 cents per share versus 37 cents expected on $566 million in sales, above the $557.6 million in the Zacks consensus and +12% year over year. The company also announced a $1.2 billion share buyback program, and has never missed a consensus earnings estimate in its publicly traded history. Shares of Dropbox had been up more than +9% on the news, but are again wallowing in negative territory in late trading.

Shake Shack (SHAK) is doing even worse, despite a beat on the bottom line (a loss of -11 cents per share versus expectations of -17 cents) and a meet on the top (to $203 million). Guidance being somewhat lowered accounts for some of this sell-off, as does this valuation compression mentioned earlier; the -9% drop burns away most of the +12.7% gains over the past month. Same-store sales in the quarter came in at +20.8%, in-line with expectations.

And Roku (ROKU) , after falling more than -10% in the regular session, continued to tumble in after-hours trading another -7% on worse-than-expected revenue numbers in the quarter: $865 million versus $894 million anticipated. Paid Users came in slightly higher than expected, as did Average Revenue Per User (ARPU). Active Accounts in the quarter rose +17%, but hours watched declined per account. Shares were already -38% year to date.