Shares of Block (SQ 3.19%), a financial technology company, were sliding today, likely on news of rising tensions between Ukraine and Russia.
The tech stock was down by 3.1% as of 11:39 a.m. ET.
Investors have grown increasingly concerned about a potential conflict in Europe after Russian President Vladimir Putin formally acknowledged rebel-held regions in Ukraine. Putin has ordered Russian troops in the regions, which has spurred the U.S. and E.U. into saying that they will issue sanctions against the two breakaway regions.
The potential for conflict in Europe has weighed on individual stocks and the broader market over the past couple of weeks.
Adding to the negative investor sentiment is the fact that inflation is at a 40-year high. With inflation skyrocketing the Federal Reserve is poised to raise interest rates this year, potentially starting as early as next month.
Rising interest rates typically hurt high-growth stocks like Block because it makes borrowing costs more expensive, which can in turn cause companies to invest less in new areas of growth.
Making matters worse for Block investors is the fact that RBC Capital analyst Daniel Perlin lowered his price target for Block's stock today from $203 to $147. Perlin maintained his outperform rating on the stock.
Investors may want to brace for more volatility from Block's share price. In addition to macroeconomic events, the company will report its fourth-quarter 2021 financial results on Feb. 24.
The company reported mixed results for its third quarter on Nov. 4, 2021, which, in addition to inflation concerns, contributed to Block's stock tumbling 64% over the past six months. With the share prices of tech companies under pressure right now, long-term investors should expect some more instability from Block's shares in the short term.