What happened

The stock market's May slump continued on Monday, with all three major averages firmly in the red and tech-focused stocks getting hit harder than most. But fintech giant Block (SQ 16.13%) -- better known as Square -- was a major underperformer. As of 2:30 p.m. ET, Block shares had lost 16% for the day.

So what

Despite the fact that we're in the middle of earnings season, that isn't the reason for today's decline. But there are a few potentially negative catalysts to mention.

Customer inserting credit card into Square terminal.

Image source: Block.

For one thing, recession fears are growing, and a slowdown in consumer spending would certainly hurt a business that mainly depends on fee income from people spending, sending, and moving money. And it's worth noting that Bitcoin recently plunged to a 2022 low, and Block makes a significant amount of money from customers using Cash App to buy and sell the digital currency.

Finally, Block got hit with a wave of analyst downgrades today. It's rare to see such a flurry of analyst activity on the same day, but Block got hit with either downgrades or lowered price targets from analysts at Morgan Stanley, Barclays, UBS, Goldman Sachs, and several others.

Now what

To be sure, it's wise to take analyst moves with a big grain of salt, and it's worth pointing out that all but one of the firms that updated their price targets today have buy ratings on the stock.

On the other hand, fears of a slowdown in consumer spending are more concerning. If the U.S. ends up avoiding a recession, the current price could look like a bargain, but it's definitely worth keeping a close eye on.