Meta Stock Crumbles as Layoff Rumors Spark Sell-Off

Why is Meta (META) stock dropping today?

Meta (Nasdaq: META) stock opened sharply lower in pre-market trading after a series of reports suggested the company is preparing to cut thousands of jobs to reduce spending on AI infrastructure. The news, if confirmed, would mark a dramatic shift in Meta’s strategic focus and has already sparked volatility in the stock. With a 3.34% drop from the previous close, the move reflects investor concern over potential operational and financial impacts from the rumored cuts.

The broader market hasn’t been immune to the jitters. Nasdaq and S&P 500 futures traded cautiously higher, but Meta’s drop remains an outlier. The stock’s recent 60-day percentile of 23.4% suggests it’s already in a consolidation phase, but this sharp pre-market move could force a more aggressive correction if the news gains traction.

That said, the catalyst behind the move lacks formal confirmation. No official press release or earnings guidance from Meta has surfaced to validate the layoffs. Most of the reports are based on third-party leaks or media speculation. As a result, the market is treating the news with caution.

Still, in today’s fast-moving market environment, unconfirmed but credible headlines can move stocks quickly. And with Meta trading at a 60-day low of $600 and a recent high of $744, any material news has the potential to shift sentiment dramatically.

What to watch for in the next 3–5 trading days?

The next 3–5 days will be critical for META as the stock tries to stabilize or break through key psychological levels. The current price of $633.69 sits just below its 20-day high of $672.77 but remains above the 60-day low of $600. This puts the stock in a mid-range position, but the recent pre-market sell-off introduces a new layer of uncertainty.

A key question is whether the move is a short-term correction or the start of a deeper pullback. Technical indicators like the 20-day MA (at $647.41) and 50-day MA (at $654.26) both remain above the current price, suggesting a bearish divergence. The RSI of 40.37 also points to a moderate pullback rather than a full-blown reversal.

Even so, the lack of volume confirmation raises red flags. The pre-market session lacks the liquidity of regular trading hours, so the early drop could be a false signal. If Meta can hold above $634, the stock may be able to retest the 20-day MA. But a break below $634 could accelerate the trend downward, targeting as low as $615.23 based on ATR projections.

On the flip side, a strong rebound above $634 would signal a rejection of the bearish narrative. But given the weak participation and lack of clear catalyst confirmation, the odds of a full recovery in the near term remain low.

What are META support and resistance levels?

From a technical standpoint, Meta’s key support and resistance levels are tightly clustered around the $634 level. This is both a critical resistance and support level, making it a key focal point for traders and investors. The nearest support is at $634, and the nearest resistance is also at $634 — a sign of indecision in the market.

Below $634, the next key support levels are at $630, $625, and $620. These levels offer some cushion but would require strong volume confirmation to hold. Above $634, the stock faces a test of the 20-day moving average at $647.41 and the 50-day MA at $654.26. Breaking above the 20-day MA would be a meaningful positive signal, but it’s unlikely without stronger participation.

The ATR of $18.47 suggests that Meta is in a period of high volatility. This means that even small moves could result in large swings, especially in the current fragile environment. A break of either the $634 level or the 20-day MA will be critical in determining the stock’s near-term direction.

In practice, the coming hours will be key. If the stock can hold above $634 with a pickup in volume, it may find a floor. But a drop below that level without a clear reversal could lead to further selling pressure and a deeper pullback into the $615 range.