What Happened?

A number of stocks fell in the afternoon session after investors raised concerns over the stability of the private credit market, following a key announcement from a major bank. 

JPMorgan Chase announced it would be restricting lending to private credit providers. This decision came after the bank marked down the value of several loans in its portfolio, signaling potential stress in this rapidly growing corner of the finance world. The move sparked broader industry jitters, leading to a rush for liquidity. In response to these pressures, several large industry names were forced to limit redemptions for their key funds, adding further downward pressure on financial sector shares as investors weighed the potential for wider contagion.

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 Affirm (NASDAQ: AFRM) fell 8.1%. Is now the time to buy Affirm? Access our full analysis report here, it’s free.
• Investment Banking & Brokerage company Houlihan Lokey (NYSE: HLI) fell 3.8%. Is now the time to buy Houlihan Lokey? Access our full analysis report here, it’s free.
• Payment Processing company Shift4 (NYSE: FOUR) fell 5.4%. Is now the time to buy Shift4? Access our full analysis report here, it’s free.
• Payment Processing company Fiserv (NASDAQ: FISV) fell 3.8%. Is now the time to buy Fiserv? Access our full analysis report here, it’s free.
• Diversified Financial Services company Paymentus (NYSE: PAY) fell 3.7%. Is now the time to buy Paymentus? Access our full analysis report here, it’s free.

Zooming In On Affirm (AFRM)

Affirm’s shares are extremely volatile and have had 50 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 previous big move we wrote about was 13 days ago when the stock dropped 8.4% on the news that the release of a stronger-than-anticipated Producer Price Index (PPI) report showed wholesale inflation rose more than expected in January. The U.S. Bureau of Labor Statistics reported that the PPI, a key measure of inflation at the wholesale level, increased by 0.5% last month, significantly above the 0.3% consensus forecast from economists. On a year-over-year basis, the index rose 2.9%. This unexpectedly high reading suggests that inflationary pressures in the supply chain are more persistent than previously thought. The data has dampened investor optimism for near-term interest rate cuts from the Federal Reserve, as the central bank is less likely to lower borrowing costs while inflation remains elevated. This shift in expectations for monetary policy triggered a broad sell-off across the market, as traders adjusted to the possibility of interest rates remaining higher for longer.

Affirm is down 37.5% since the beginning of the year, and at $46.28 per share, it is trading 49.8% below its 52-week high of $92.18 from September 2025. Investors who bought $1,000 worth of Affirm’s shares 5 years ago would now be looking at an investment worth $581.64.

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