What happened
Shares of Marqeta (MQ 3.27%), a card issuer and payments processor, were falling today, just one day after its share price jumped 9%. Today's decline likely comes as investors processed new jobs data that showed the labor market continues to be strong.
While that's good news for people looking for jobs, it also makes it more likely that the Federal Reserve will continue hiking the federal funds rate -- which has tech investors worried. As a result, Marqeta's stock fell 4.7% as of 3:10 p.m. ET.
So what
The Department of Labor said earlier today that there were 193,000 jobless claims for the week ending on Sept. 24, which was lower than analysts' estimates of 215,000. A tight labor market is good for job seekers but also means that the Fed will be less worried that interest-rate hikes will hurt the economy.
Image source: Getty Images.
The Federal Reserve recently issued its latest interest-rate hike -- its third-consecutive increase of 75 basis points -- in order to tamp down inflation. The central bank has also indicated that it will continue raising rates in 2023.
Marqeta shareholders and tech investors, in general, are increasingly concerned that aggressive interest-rate hikes will push the U.S. economy into recession. If that happens, Marqeta's card-issuing and payment-processing business could slow down as consumers cut back on spending.
NASDAQ: MQ
Key Data Points
Now what
Marqeta's stock has been on a downward trajectory since the company went public back in June. Its share price has tumbled 76% since its initial public offering (IPO).
But the company isn't experiencing its share-price drop alone. The tech sector, in general, has experienced very significant losses over the past year, as well.
With the Fed likely to continue its rate increases, Marqeta investors can likely expect some more share-price volatility in the near term.
