Shares of Square (NYSE:SQ) were sliding today on no company-specific news. The tech stock was likely tumbling as a result of the broader stock market losing ground today as investors processed several important bits of news.
Square's stock was down 3.4% as of 1:12 p.m. EDT on Monday.
The stock market is generally bearish this time of the year, and this September investors have been particularly keen on selling their stocks for several reasons.
The first major driver has been the rising number of COVID-19 cases. Positive cases are at the same level right now as they were back in January 2021, causing investors to worry about what that means for businesses across many sectors.
Many companies have delayed plans to bring their employees back into the office, and some businesses, including many restaurants, are still having a hard time finding workers to fill open positions.
All of this uncertainty has created fears among some investors that many companies are still feeling the negative financial effects of the coronavirus.
Additionally, investors are closely watching a two-day Federal Reserve meeting that begins tomorrow. The Fed will discuss the possibility of slowing down monetary stimulus for the economy. A pullback from spending, or even an indication of a future pullback, has investors on edge.
And finally, Square's stock likely fell along with the rest of the market today because investors are increasingly concerned that one of China's largest property developers, China Evergrande Group (OTC:EGRN.F), could soon default on some of its loans. The property development and management company is so large that even the idea of its defaulting is causing the market to stumble.
While Square's stock was taking a hit today, investors should remember that the reasons it's falling have nothing to do with the company's underlying business.
In fact, Square reported very strong results in its latest quarter (released on Aug. 1), with gross profit soaring 91% and EBITDA jumping 268% from the year-ago quarter. Additionally, Square's total revenue (excluding Bitcoin) was up 87% year over year.
So investors who bought Square's stock to hold for the long-term should probably take today's dip, and any other dips caused by macro trends, in stride and avoid panic selling.