What happened

Shares of Axos Financial (NYSE:AX) dropped 12.7% on Monday, coinciding with a major sell-off in bank stocks and the market as a whole.

So what

The financial markets, already reeling from fears that the COVID-19 coronavirus outbreak could stall the global economy, were rocked over the weekend by news that OPEC failed to reach an agreement with its allies to curtail oil production. Oil prices plunged more than 20% in response, taking a huge number of energy stocks down with them.

This frightening confluence of events sent investors scurrying toward safe-haven investments today. Investors piled into U.S. Treasury bonds, sending yields down to historic lows. In turn, shares of many banks -- whose profit margins tend to shrink when interest rates decline -- fell sharply.

Declining prices on a digital screen.

Banks stocks fell hard on Monday. Image source: Getty Images.

Now what 

Axos Financial makes much of its profit from the loans it lends to its customers. If interest rates remain depressed, its profitability will suffer. Moreover, should the U.S. economy fall into a recession due to the fallout from the COVID-19 outbreak, demand for the type of loans that Axos offers could decline. Given these potential challenges, Axos Financial's shares are likely to remain under pressure in the weeks ahead.