What happened
Shares of the Brazilian digital bank Nu Holdings (NU -1.37%) were falling today as investors continue to process rising inflation and the Federal Reserve's recent decision to increase the federal funds rate by an additional 75 basis points.
The fintech stock was down by as much as 8% this morning and was down by 5.8% as of 11:53 a.m. ET.
So what
On Wednesday the Federal Reserve hiked the federal funds rate by an additional 75 basis points and said that it would continue raising rates into 2023.
Image source: Getty Images.
That has sent the broader market reeling and Nu's stock stumbling along with it. Investors appear to be increasingly concerned that the Fed will end up spurring a recession in the U.S. if it continues to raise rates too much and too fast.
Adding to those concerns is the fact that many other federal banks around the world are also increasing their rates as well, which is causing investors to worry that a global recession could be around the corner.
Nu investors appear to be processing all of this economic information right now and they don't like what they see.
Now what
Nu's share price actually got a lift recently when the company reported results for its second quarter (which ended on June 30). The company grew its users at a healthy pace and revenue increased by 230% from the year-ago quarter, resulting in its share price rising 16% last month.
But Nu investors are also looking at the bigger global economic picture right now and they're concerned that a global slowdown could end up hurting the fintech's banking business.
That doesn't make Nu a bad investment, but it does mean that investors can likely expect some more volatility from this stock as investors continue to process new data about rising interest rates and the global economy.
