What happened

After a big rally on Monday fueled by positive COVID-19 vaccine news, the stock market is having a fairly good day on Tuesday. As of 11:30 a.m. EST, the Dow Jones Industrial Average was up by 0.7%, while the S&P 500 and Nasdaq Composite were slightly in the red.

Fintech giant Square (NYSE:SQ) is one of the biggest underperformers. The stock is down by nearly 5% today, and that comes on the heels of an even larger decline yesterday. In all, Square has lost 12% of its value since the weekend.

Customer paying on Square terminal in a bike shop.

Image source: Getty Images.

So what

The biggest driving force is likely a market rotation away from so-called "stay-at-home" stocks and into the more beaten-down industries that could be the biggest beneficiaries of a COVID-19 vaccine. We're seeing bank stocks, REITs, and experiential companies like casinos and cruise lines soar, and tech-focused companies that have thrived during the pandemic fall.

To be sure, there's certainly a physical retail element to Square's payment processing business that is likely to benefit from the economy reopening. But adoption of the Cash App and several of Square's online business-focused offerings have accelerated in the pandemic.

It's also worth noting that Square announced and priced a new $1 billion convertible debt offering to raise capital. Now, at a 0.25% interest rate this is a nice way to get cheap capital to help fuel growth. On the other hand, as convertible debt it could ultimately end up diluting investors (although with a conversion price of about $299, this would be a good problem for Square investors).

Now what

It's important to note that even after the recent decline, Square's stock price has nearly tripled over the past year. So, investors should take a step back and take today's move with a grain of salt.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.