Trump's policies scare the US stock market, fintech stocks become the "hard-hit area"

According to the Zhitong Finance APP, as concerns about the U.S. economic outlook continue to grow, the U.S. stock market is facing significant pressure, with financial technology companies closely related to consumer spending and small businesses being particularly hard hit. The tech-heavy Nasdaq index fell 2.1% on Thursday, on track for its worst weekly performance since September last year, with Shift4 Payments (FOUR.US), Toast (TOST.US), and BILL Holdings (BILL.US) experiencing even larger declines of 6.7%, 6.2%, and 4%, respectively.

U.S. President Donald Trump's erratic tariff policies have led to market volatility. On Thursday, U.S. Treasury Secretary Scott Basset stated that the Trump administration is more focused on the long-term health of the economy, adding that he "is not worried about a bit of volatility occurring over the next three weeks."

The volatility of fintech stocks is often higher than that of traditional banks and lending institutions, as investors enter the market when risk tolerance is high and exit when sentiment turns conservative. Barclays Bank predicts that Trump's high tariff policies may reduce U.S. GDP and increase inflation in the short term, leading to further interest rate cuts by the Federal Reserve this year.

Shift4, which provides payment processing technology, has seen its stock price drop 19% this year following Thursday's decline, nearly double the drop of the Nasdaq index and more than triple that of the S&P 500 index. In February, after the company released earnings guidance below analyst expectations, its stock price fell 17% in a single day.

At the same time as releasing its financial report, Shift4 announced it would acquire the payment platform Global Blue for a valuation of $1.5 billion in equity, which is about one-fifth of Shift4's current market value. Analysts at DA Davidson subsequently lowered Shift4's target price from $140 to $124 "to reflect acquisition integration and financial leverage risks."

Toast's payment technology is popular in restaurants and cafes, but the company's stock has performed poorly this month, down 15% so far in March, while the Nasdaq index has fallen 8%. The company's earnings report in February exceeded expectations, but its stock still declined.

Analysts at Piper Sandler stated that after doubling its market value and significantly improving profitability last year, Toast now faces a "daunting task of surpassing 2024."

The competitive fintech landscape has led to stricter scrutiny of profitability and sustainable growth. Affirm Holdings (AFRM.US), known as the "Buy Now, Pay Later" loan product, faces intense competition, with its stock price falling nearly 4% on Thursday and down 23% year-to-date.

BILL Holdings provides spending and expense software for many small businesses. The company faced a sell-off after releasing its financial report. Due to weak earnings guidance, BILL Holdings' stock price plummeted 36% in a single day. Year-to-date, the stock has fallen 48%