What happened

The stock market was having a generally weak session on Wednesday, with all three major averages in the red throughout the morning. However, Square (NYSE:SQ) has been a major underperformer. As of noon EDT, shares of the fintech specialist were down by nearly 5%.

So what

There are three main stories and market forces that could be affecting Square's stock price today:

  • On a positive note, the company announced the launch of its Square Register hardware in Canada, which could bring larger sellers in the key international market into Square's ecosystem.
Hand holding a smartphone next to Square Register hardware.

Image source: Square.

  • On the other hand, we learned that PayPal (NASDAQ:PYPL) is spending $2.7 billion to acquire Japanese buy now, pay later (BNPL) company Paidy. Not only is Japan one of the few international markets where Square has a presence, this also signals that PayPal is pushing into the BNPL space more aggressively than previously thought. Remember that Square is spending $29 billion to acquire Afterpay, and PayPal becoming more interested in BNPL could change the competitive dynamics.
  • Finally, there is quite a bit of general weakness in the tech sector today. While all three major averages are in the red, the tech-heavy Nasdaq is by far the worst performer, and many other high-growth tech stocks are among the market's worst performers.

Now what

The two company-specific news items are likely not what's causing today's move. While PayPal's push into the Japanese BNPL market is certainly not a positive factor for Square, it isn't likely to be a major needle-mover affecting the business.

Today's move seems to be fueled by severe weakness in growth stocks more than anything else. While it's worth keeping an eye on the competitive pressures in the BNPL space, PayPal's news shouldn't be too alarming to shareholders.

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.