What Happened?
Shares of financial services company Robinhood (NASDAQ: HOOD) fell 7.1% in the morning session after markets seemed to have caught "tariff/trade war fever" once again (Nasdaq down 1.9%, S&P 500 down 1.2%) amid broader geopolitical anxiety. The volatility was perhaps also related to uncertainty surrounding the Fed's rate decision to be announced later in the week. The consensus estimate was for the Fed to keep interest rates at the range of 4.25%-4.5%. This could be a bit of a letdown for the dovish camp, expecting some policy relief to help offset the growing market weakness amid the ongoing trade war, which some analysts considered to be bad for growth and corporate earnings.
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What The Market Is Telling Us
Robinhood’s shares are extremely volatile and have had 49 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 21 days ago when the stock dropped 10.6% on the news that stocks tied to the crypto market fell, mirroring the weakness in digital assets. Bitcoin, the largest cryptocurrency by market cap, dropped to $87,000, a 20% decline from its all-time high of $109,114 on January 20, 2025. Historically, when Bitcoin stumbles, the broader crypto market takes a harder hit, and this time was no exception.
With traders cashing out, cutting losses, or just waiting on the sidelines, this could translate to a slowdown in trading activity on platforms like Robinhood and Coinbase, which could impact their revenues.
Robinhood is up 1.3% since the beginning of the year, but at $39.96 per share, it is still trading 38.8% below its 52-week high of $65.28 from February 2025. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $1,147.
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