What Happened?
A number of stocks fell in the afternoon session after September consumer price inflation accelerated to 3.7% and core inflation topped estimates, reigniting concerns over Federal Reserve interest rate hikes.
The hotter-than-expected data showed headline consumer prices rising 3.7% annually, while core inflation, which excludes volatile food and energy prices, reached 2.6%. In the wake of the report, traders raised the implied probability of a central bank rate increase at the next meeting to nearly 44%. The sudden shift in policy expectations pushed Treasury yields higher and triggered volatility across bond markets.
Banking leaders pointed out that persistent interest rate uncertainty and Treasury market swings are dampening client trading activity and stalling corporate dealmaking as reported by TheStreet. When borrowing costs remain high and unpredictable, corporations typically hold off on mergers, acquisitions, and debt offerings, creating broad sector-wide pressure on investment banking revenue.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Personal Loan company SoFi (NASDAQ: SOFI) fell 6.9%. Is now the time to buy SoFi? Access our full analysis report here, it’s free.
- Custody Bank company BNY (NYSE: BNY) fell 3%. Is now the time to buy BNY? Access our full analysis report here, it’s free.
- Credit Card company Bread Financial (NYSE: BFH) fell 3%. Is now the time to buy Bread Financial? Access our full analysis report here, it’s free.
- Investment Banking & Brokerage company Perella Weinberg (NASDAQ: PWP) fell 4.2%. Is now the time to buy Perella Weinberg? Access our full analysis report here, it’s free.
- Investment Banking & Brokerage company Morgan Stanley (NYSE: MS) fell 3.3%. Is now the time to buy Morgan Stanley? Access our full analysis report here, it’s free.
Zooming In On SoFi (SOFI)
SoFi’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 13.5% on the news that its first-quarter earnings results were overshadowed by a disappointing financial outlook for the second quarter. The digital financial services company reported better-than-expected first-quarter revenue of $1.1 billion, a 42.8% increase year-over-year, and posted an adjusted profit of $0.12 per share, which was in line with analyst expectations. However, investor sentiment soured on the company's guidance for the upcoming second quarter. SoFi projected revenue growth of 30% and an EBITDA margin of 30%, both of which missed Wall Street's forecasts. While the company maintained its full-year revenue outlook, the weaker near-term forecast sparked concerns about its growth trajectory, leading investors to sell off the stock.
SoFi is down 48.9% since the beginning of the year, and at $14.04 per share, it is trading 56.4% below its 52-week high of $32.21 from November 2025. Investors who bought $1,000 worth of SoFi’s shares 5 years ago would now be looking at only $715.80.
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