What happened

The stock price of Affirm Holdings (AFRM -3.63%) bounced around Monday, up as much as 1.6% right after the opening bell and then down some 5.1% at around 10:40 a.m. EDT. By the closing bell, the stock was down about 1.64% to $18.59 per share.

The Dow Jones Industrial Average ended the day down 94 points (0.3%), the S&P 500 was off 27 points (0.8%), and the Nasdaq dropped 110 points (1%). 

So what

There did not appear to be any single catalyst that drove the "buy now, pay later" stock lower on Monday. Rather, it was part of an overall malaise in the market on Monday, as investors perhaps gird themselves for a busy week.

For starters, third-quarter earnings start this week. And the big banks, like JPMorgan Chase, Citigroup, and Wells Fargo, all report this week. As the large banks are seen as bellwethers for the market, expectations may be low given the state of the economy.

To that point, JPMorgan Chase CEO Jamie Dimon said in an interview Monday that he believes the economy could dip into recession mid-next year and the S&P 500 could fall another 20%.

Now what

The other big news this week is the release of the September Consumer Price Index (CPI) on Thursday. Investors will be watching to see if the Federal Reserveʻs interest rate hikes have moved the needle on inflation. Its results will go a long way toward determining the Fedʻs actions on interest rates at its November meeting.

As a payment stock, Affirm is highly sensitive to the movements of the CPI. Higher inflation has taken a bite out of savings for Americans, as the personal savings rate in August was at its lowest point since 2008. That, in turn, reduces discretionary spending, which hurts payments stocks.

Affirm reports its next quarterly earnings on Nov. 9. Investors should hold until there is more visibility on inflation and interest rates, and on their effect on the economy.