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:
- Custody Bank company StepStone Group (NASDAQ: STEP) fell 3.2%. Is now the time to buy StepStone Group? Access our full analysis report here, it’s free.
- Diversified Financial Services company Euronet Worldwide (NASDAQ: EEFT) fell 5%. Is now the time to buy Euronet Worldwide? Access our full analysis report here, it’s free.
Zooming In On Euronet Worldwide (EEFT)
Euronet Worldwide’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 4.5% on the news that the company reported third-quarter 2025 financial results that saw revenues fall short of analyst estimates and a significant year-over-year decline in profitability.
While revenue grew 4.2% from the previous year to $1.15 billion, it missed the consensus estimate of $1.2 billion. The company's adjusted earnings per share of $3.62 was in line with expectations, but this was overshadowed by weaker underlying performance. Specifically, pre-tax profit experienced a 13.5% year-over-year decline, and the pre-tax profit margin contracted by 3.2 percentage points. The market reacted negatively to the report, which an analyst summary described as a quarter that "could have been better" with few positives to be found.
Euronet Worldwide is down 9.8% since the beginning of the year, and at $66.82 per share, it is trading 40.7% below its 52-week high of $112.74 from June 2025. Investors who bought $1,000 worth of Euronet Worldwide’s shares 5 years ago would now be looking at only $435.88.
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