Key takeaways:
- Fintech stocks like Affirm, PayPal, and Block plummeted as President Trump’s latest tariffs fueled recession fears and rattled investor confidence.
- However, the sector staged a massive rebound after Trump announced a 90-day pause on most of his planned tariffs.
- While the pause provides temporary relief, uncertainty remains high as the trade war with China escalates and companies brace for potential impacts on consumer spending.
Introduction
The fintech industry found itself caught in the crossfire as President Donald Trump’s sweeping new tariffs 1 rattled global markets and intensified recession fears. Shares of prominent fintech companies, including Affirm, PayPal, and Block, plummeted in the wake of the tariff announcements, reflecting investors’ concerns about the potential impact on consumer finances and the broader economy.
Fintech Stocks Plunge Amid Tariff Turmoil
The fintech sector, which includes companies like Robinhood, Affirm, and SoFi, has been particularly vulnerable to the volatility caused by Trump’s trade war escalation. Many of these firms rely heavily on consumer spending and the ability of borrowers to repay loans, making them susceptible to economic shocks.
According to data from Reuters 2, shares of Affirm, a leading “buy now, pay later” provider, plunged more than 21% since the tariffs were announced on April 2nd. Robinhood, the popular stock trading app, saw its shares decline by over 17%, while SoFi, which offers loans and banking services, experienced a nearly 20% drop.
“A recession typically hits nice-to-have mass-market consumer businesses, including fintechs, harder than other sectors because the first group to pull back spending in a recession is lower-income consumers,” said James Ulan, director of research at PitchBook 2.
Massive Rebound as Trump Pauses Tariffs
However, the fintech sector staged a remarkable comeback on Wednesday, April 9th, after President Trump announced a 90-day pause on most of his planned tariffs 3. The move, which included a reduced overall tariff of 10% during that period, provided much-needed relief for investors and sparked a historic rally across U.S. stock markets.
Affirm surged 20%, while Toast and Block rose 13%, and PayPal increased by 10% 1. The broader S&P 500 index soared 9.5%, its third-best day since 1940, as investors celebrated the temporary reprieve from the escalating trade tensions.
“It has been great news for the market… to see U.S. bonds sell off has been very strange, amid a broader emphasis on taking risk off in portfolios. Seeing stress build in the credit market was really worrying. So today was a great relief,” commented Tom Bruce, a macro investment strategist at Tanglewood Wealth Management 3.
Uncertainty Remains as Trade War Escalates
While the 90-day pause provided a much-needed breather for markets, analysts cautioned that the trade war is far from over, and the escalating battle between the U.S. and China could continue to create volatility and uncertainty for businesses and consumers.
“The 90-day pause doesn’t eliminate the threat of tariffs — it just delays it. Investors are still pricing in risk, including inflation, discretionary pullbacks, hardware import costs, and credit exposure,” noted the CNBC report 1.
Moreover, China was a notable exception to the pause, with Trump announcing that tariffs on Chinese imports would increase to 125% 3. This move heightens the possibility of further retaliation from Beijing and could exacerbate the already strained trade relations between the two economic superpowers.
Conclusion
The fintech industry’s rollercoaster ride underscores the sector’s vulnerability to broader economic conditions and the potential impacts of the ongoing trade war. While the temporary pause on tariffs provided a much-needed reprieve for investors, the long-term implications remain uncertain, as companies brace for potential effects on consumer spending, credit exposure, and supply chain disruptions.
As the trade tensions between the U.S. and China continue to escalate, fintech firms and investors alike will need to navigate the uncertain landscape carefully, closely monitoring market developments and adjusting strategies as needed. Ultimately, a resolution to the trade disputes could pave the way for a more stable economic environment, benefiting the fintech sector and the broader financial markets.
References
1 MacKenzie Sigalos (2025, April 9). “Affirm surges 20% as fintech rallies on tariff pause, but risk remains”. CNBC. Retrieved [Current Date].
2 Hannah Lang (2025, April 7). “Fintech companies caught up in tariff turmoil”. Reuters. Retrieved [Current Date].
3 Reuters Staff (2025, April 9). “Investors react as stocks jump on Trump’s tariff pause”. Reuters. Retrieved [Current Date].
4 Associated Press (2025, April 9). “U.S. stocks shoot to historic gains after Trump pauses most of his tariffs”. PBS NewsHour. Retrieved [Current Date].
5 PYMNTS (2025, April 8). “Banks and FinTechs Navigate Market Mayhem Amid Escalating Tariff Fears”. PYMNTS.com. Retrieved [Current Date].
