Key Highlights

  • SoFi Technologies fell to $16.06, Affirm Holdings dropped to $68.80 and Robinhood Markets slid to $116.62.
  • Tuesday's Job Openings and consumer confidence data, Wednesday's PCE Inflation report and Friday's September jobs report could all move rates.
  • The 10-year Treasury Yield rose to its highest level since 2007, and the 30-year hit its highest since 2004.
  • The S&P 500 fell 59.72 points to 7,683.69 and the Nasdaq Composite lost 248.34 points to 26,820.38.

A surge in Treasury yields and fresh inflation worries knocked SoFi (NASDAQ:SOFI), Affirm (NASDAQ:AFRM) and Robinhood (NASDAQ:HOOD) lower on Monday, September 28, as rate-sensitive Fintech names took a hit.

Three fintech favorites in the red

Financial technology stocks had a rough Monday, September 28. SoFi Technologies fell to $16.06, Affirm Holdings dropped to $68.80 and Robinhood Markets slid to $116.62. The ARK Fintech ETF, a basket of digital-finance stocks, also fell on the day.

Why yields hit fintech so hard

Fintech companies feel higher interest rates in several ways. Lenders such as SoFi and buy-now-pay-later provider Affirm depend on borrowing to fund the loans they make, so higher rates can raise their funding costs and squeeze margins, while also making Credit more expensive for their customers. Growth-oriented fintech stocks are also valued on profits expected far in the future, which look less valuable when bonds pay more today.

On Monday, the Bond Market delivered a jolt. The 10-year Treasury yield rose to its highest level since 2007, the 30-year hit its highest since 2004, and the 2-year climbed to its highest since May 2024. The Federal Reserve raised rates at its September meeting for the first time in three years, and futures now price a strong majority chance of another hike in October.

The oil and inflation link

Oil added fuel to the fire. Crude rose after President Trump rejected Iran's proposal to reopen the Strait of Hormuz, reviving fears that inflation will stay stubborn. TD Securities' Prashant Newnaha said: "President Trump knocking back Iran's offer for diplomacy is driving a renewed rise in oil prices and is weighing on USTs."

Fed Governor Lisa Cook added to the hawkish tone, saying: "I expect to see continued pressure on inflation from the AI build-out … and from the pass-through of higher oil prices."

Crypto and the wider financial sector

For Robinhood, crypto trading is an important business, and Bitcoin slipped on Monday to around $83,450 near the US stock market close. That added to the pressure on a stock already exposed to swings in retail trading activity.

The broader financial sector was also among Monday's weaker groups, falling more than most. The KBW Bank index fell, and Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM) slid. Latin American digital bank Nu Holdings (NYSE:NU) dropped sharply after market reports reported it was in talks about a possible bid for UK neobank Monzo; no deal has been confirmed. Coinbase (NASDAQ:COIN) was a rare riser after expanding a Stablecoin Partnership with Citigroup (NYSE:C).

The overall market was weak. The S&P 500 fell 59.72 points to 7,683.69 and the Nasdaq Composite lost 248.34 points to 26,820.38, while decliners outnumbered advancers 2,218 to 1,185 on the Nasdaq.

Bond yields drive fintech this week

The path of bond yields is the key driver for fintech stocks this week. Tuesday's job openings and consumer confidence data, Wednesday's PCE inflation report and Friday's September jobs report could all move rates. Economists expect about 98,000 new jobs in September.

Schwab (NYSE:SCHW)'s Nathan Peterson offered a hopeful scenario: "If Treasury yields pull back (or at least stop moving higher), this could help provide a lift to stocks." If yields keep climbing, however, lenders like SoFi and Affirm may remain under pressure. Consumer confidence data will also offer clues about borrowers' health.