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:
- Investment Banking & Brokerage company Moelis (NYSE: MC) fell 3.8%. Is now the time to buy Moelis? Access our full analysis report here, it’s free.
- Investment Banking & Brokerage company Lazard (NYSE: LAZ) fell 5%. Is now the time to buy Lazard? Access our full analysis report here, it’s free.
- Personal Loan company Sezzle (NASDAQ: SEZL) fell 7.1%. Is now the time to buy Sezzle? Access our full analysis report here, it’s free.
- Personal Loan company Affirm (NASDAQ: AFRM) fell 10.6%. Is now the time to buy Affirm? Access our full analysis report here, it’s free.
- Specialty Finance company Encore Capital Group (NASDAQ: ECPG) fell 3.1%. Is now the time to buy Encore Capital Group? Access our full analysis report here, it’s free.
Zooming In On Affirm (AFRM)
Affirm’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. But moves this big are rare even for Affirm and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 10.7% on the news that the company reported strong third-quarter 2025 results that beat Wall Street's expectations for both revenue and profit. For the quarter, Affirm posted revenue of $933.3 million, a 33.6% increase from the previous year, which surpassed analyst forecasts. The company’s profitability was a key highlight, with earnings per share of $0.23, more than double the consensus estimate of $0.11. This strong bottom-line performance was driven by improved operational efficiency, as its pre-tax profit margin expanded by 23 percentage points compared to the same quarter last year. The positive results, showcasing both strong growth and increasing profitability, fueled investor confidence.
Affirm is down 6.2% since the beginning of the year, and at $69.46 per share, it is trading 19% below its 52-week high of $85.78 from July 2026. Investors who bought $1,000 worth of Affirm’s shares 5 years ago would now be looking at only $467.87.
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