The stock market was having a so-so day on Tuesday, with most major indexes flat or slightly in the red at midday. However, fintech giant Square (SQ 5.70%) was a big underperformer. As of 1 p.m. EST, Square had dropped by nearly 6% for the day, adding to a string of recent pullbacks in the stock.
There doesn't seem to be any company-specific news driving Square's stock price lower. Rather, this seems to be a continuation of a steady sell-off following a massive rally. Since peaking at more than $243 per share about a week ago, Square has lost about 14% of its value.
It's also worth noting that there has been a steady rotation out of "stay-at-home" stocks and into "reopening" stocks recently, and the passage of the $900 billion stimulus bill added fuel to that fire. While I wouldn't put Square entirely in the stay-at-home category, with Cash App users doubling over the past year, it's fair to say Square certainly received a tailwind from the pandemic. Investors could be taking profits and rotating their capital into stocks that have more to gain from the economy reopening.
It's worth mentioning that even after today's pullback, Square is still up by more than 235% in 2020, which further supports the premise that the negative price action of the past few days is merely a "cooling off" of an extremely hot stock.