Affirm Holdings (AFRM -0.96%) suffered a significant drop on Monday, falling 4.6% on the day to $29.49. The stock price had been down as much as 6.6% in early-afternoon trading.
It was not a great day for the markets across the board, as the Dow Jones Industrial Average ended the day 641 points lower, while the S&P 500 and Nasdaq fell 2.1% and 2.5%, respectively.
There appeared to be no direct catalyst as to why Affirm -- a buy now, pay later (BNPL) fintech -- dropped, as all the major payment companies were caught up in the overall market decline. Monday was one of the worst days for the market this quarter, hitting the brakes on what had been a nice summer rally.
The overall decline likely stems from renewed concerns about inflation. While the inflation rate dropped in July, sparking some hope that the Federal Reserve might ease up on its aggressive posture on interest rate hikes, the minutes of the July Fed meeting, released last week, indicated that the Fed would not pull back on rate hikes until inflation came down substantially. That, in turn, stoked fears of an economic slowdown, which would not be good for payment companies like Affirm.
This is a particularly big week for Affirm, as the company posts second-quarter earnings on Thursday, Aug. 25. One of its retail partners, Target, reported an earnings miss last week, which could be one of the factors weighing on investor sentiment heading into Thursday.
So keep an eye on Affirmʻs earnings report later this week, but there are two other events that bear watching for Affirm investors.
One, Fed chair Jerome Powell is set to speak at the annual Jackson Hole Economic Symposium, which convenes Aug. 25 to 27. That event could shed further light on where the Fed stands regarding the economy, inflation, and rates. Also, the U.S. Bureau of Economic Analysis (BEA) will release the July numbers for personal spending and income -- an important metric for Affirm.