What Happened?
A number of stocks jumped in the afternoon session after 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.
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:
- Investment Banking & Brokerage company Moelis (NYSE: MC) jumped 3%. Is now the time to buy Moelis? Access our full analysis report here, it’s free.
- Payment Processing company Shift4 (NYSE: FOUR) jumped 2.7%. Is now the time to buy Shift4? Access our full analysis report here, it’s free.
- Personal Loan company Affirm (NASDAQ: AFRM) jumped 4.4%. Is now the time to buy Affirm? Access our full analysis report here, it’s free.
- Asset Management company Blackstone (NYSE: BX) jumped 2.6%. Is now the time to buy Blackstone? Access our full analysis report here, it’s free.
- Personal Loan company SoFi (NASDAQ: SOFI) jumped 3.9%. Is now the time to buy SoFi? Access our full analysis report here, it’s free.
Zooming In On Affirm (AFRM)
Affirm’s shares are extremely volatile and have had 45 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 27 days ago when the stock gained 6.8% on the news that the ceasefire in the Middle East fueled a surge in global equity prices and asset valuations.
Diversified financial firms, including asset managers and wealth management platforms, are direct beneficiaries of this "relief rally," as higher market levels immediately increase assets under management (AUM) and associated fee revenue. The sudden clarity in the Middle East encouraged retail and institutional investors to rotate back into riskier assets.
Furthermore, the de-escalation is expected to unlock a backlog of corporate M&A and advisory activity. With the threat of a major energy shock removed, corporate boards feel more confident pursuing strategic acquisitions and capital raises that were sidelined during the height of the tensions. This anticipated "deal-making spring" provides a clear path for revenue growth across investment banking and brokerage divisions.
Affirm is down 9.9% since the beginning of the year, and at $66.68 per share, it is trading 27.7% below its 52-week high of $92.18 from September 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Affirm’s shares 5 years ago would now be looking at an investment worth $1,235.
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