What Happened?
A number of stocks fell in the afternoon session after the May jobs report drove Treasury yields to levels that directly challenge the sector's business model.
The 10-year yield rose above 4.5% and the 30-year climbed above 5%, thresholds that increase mark-to-market pressure on bond portfolios at asset managers and raise the hurdle rate for new private credit and infrastructure fund deployment. For firms like Blackstone, KKR, and Ares, a 30-year above 5% complicates the economics of long-duration deals, reduces the relative appeal of illiquid alternatives versus risk-free income, and slows deployment pipelines.
CME FedWatch's shift toward pricing rate hike risk by year end also challenged the recovery in M&A and IPO activity that had been supporting advisory and underwriting fee revenue. The SpaceX IPO, at a $1.77 trillion valuation, was a bright spot, but one transaction cannot offset sector-wide rate repricing.
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 Sezzle (NASDAQ: SEZL) fell 4.3%. Is now the time to buy Sezzle? Access our full analysis report here, it’s free.
- Diversified Financial Services company Payoneer (NASDAQ: PAYO) fell 3.5%. Is now the time to buy Payoneer? 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.
Zooming In On Shift4 (FOUR)
Shift4’s shares are very volatile and have had 25 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 22 days ago when the stock gained 2.7% on the news that optimism improved supported by the U.S.-China trade summit and solid U.S. economic data.
President Trump's meeting with Chinese President Xi Jinping fueled investor confidence, reducing fears of geopolitical and economic uncertainty. A de-escalation in trade tensions is typically seen as a positive for cyclical sectors like financials, as it can lead to increased global economic activity and market stability.
This optimism was further supported by a 0.5% climb in April retail sales, signaling a resilient consumer. While U.S. import prices saw their largest surge in four years, the market appeared to interpret this as a sign of strong demand rather than a significant inflationary threat.
Shift4 is down 40.7% since the beginning of the year, and at $37.15 per share, it is trading 65.2% below its 52-week high of $106.81 from July 2025. Investors who bought $1,000 worth of Shift4’s shares 5 years ago would now be looking at only $380.07.
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