Fintech Firms Rattled as Trump’s Tariffs Spark Market Turmoil

Financial technology companies such as Robinhood and buy-now, pay-later provider Affirm have found themselves in the crosshairs of President Donald Trump’s sweeping new tariffs, as fears of a consumer-driven economic slowdown sent shares tumbling across the sector.

Markets have been on edge since Trump announced a baseline 10% tariff on imports from all trading partners last week, triggering concerns about rising prices, weakening demand, and the looming threat of a global recession. Fintech firms, heavily reliant on consumer strength and spending habits, appear particularly vulnerable.

Shares of Affirm (AFRM.O) have plunged more than 21% since Trump’s April 2 announcement, while Robinhood (HOOD.O) is down over 17%. SoFi (SOFI.O), which provides loans and banking services, has fallen nearly 20%. The declines reflect investor concern that fintechs, unlike traditional banks, are more exposed to immediate shifts in consumer behavior and credit risk.

“Fintechs tend to serve consumers who are at the leading edge of economic shocks,” said James Ulan, director of research for emerging technology at PitchBook. “A recession typically hits nice-to-have mass-market consumer businesses harder than other sectors because the first group to pull back spending is lower-income consumers.”

Companies like Affirm and Robinhood also generate revenue from debit and credit card transactions — income streams that could shrink if inflation drives consumers to reduce spending.

Affirm acknowledged the heightened uncertainty, but remained optimistic. “The adoption of honest financial products like Affirm is a secular and enduring trend across market cycles,” a spokesperson said. “Against a backdrop of increased market volatility and uncertainty, Affirm’s products become even more compelling to both consumers and merchants.”

Robinhood declined to comment, while SoFi did not immediately respond to a request for comment.

Tariff-fueled inflation is also raising questions about consumers’ ability to repay loans — a key concern for fintech lenders. Affirm reported that 2.5% of its monthly loans were over 30 days delinquent as of December 31, a modest rise attributed to pricing changes. SoFi said 0.55% of its personal loans were over 90 days delinquent during the same period. In comparison, the Federal Reserve reported a 2.75% delinquency rate on consumer loans across U.S. banks.

“We know renewed inflation would be a drag on consumer credit,” said John Hecht, an analyst at Jefferies. “It crowds out excess cash flows, which means you have deteriorating ability to pay off debt.”

Investment banks are also sounding the alarm. On Monday, Goldman Sachs raised its probability estimate of a U.S. recession, citing potential fallout from Trump’s tariff push.

Trump has defended the move, saying the tariffs may bring short-term pain but are part of a long-term strategy to boost the U.S. economy and restore American jobs.

As the tariff battle heats up, fintechs may face a stress test of their business models — one that could reshape the landscape of consumer finance.

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