The Zip Co Ltd (ASX: ZIP) share price is shooting the lights out today.
After tumbling 6.81% since this time last week, shares in the buy-now, pay-later (BNPL) provider are making a comeback.
This is despite the company not releasing any announcements to the market today.
At the time of writing, Zip shares are trading 7.19% higher at 90 cents apiece.
Image source: Getty Images
What's driving Zip shares upwards today?
The Zip share price is on the move following a strong rally across Wall Street overnight.
The Dow Jones Industrial Average Index (DJX: .DJI) lifted 1.4% in what has become the best day on the index since 10 August.
Despite the growing risk of recession in the US as further rate hikes appear likely by the Federal Reserve, investors shrugged off the negative news.
Furthermore, the S&P 500 Index (SP: .INX) and tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) also recorded strong gains last night, up 1.83% and 2.14%, respectively.
This has had a positive impact on the ASX, particularly the S&P/ASX 200 Financials Index (ASX: XFJ), in which Zip belongs.
Currently, the sector is 1.58% higher at 6,108.5 points.
Other ASX BNPL companies gaining a boost today include mobile payment provider Block Inc CDI (ASX: SQ2) and Sezzle Inc (ASX: SZL). They are up 3.82% and 5.26%, respectively.
Earlier this week, the Reserve Bank of Australia (RBA) lifted its official cash rate by another 50 basis points to 2.35%.
While this is the highest level it has been since early 2015, the RBA is using its toolkit to curb inflation.
For now, the market appears to have priced in the latest rate hike. However, where Zip shares go from here will largely depend on what happens in the US.
The Federal Reserve is widely anticipated to lift rates again next week.
Zip share price snapshot
Despite today's rally, the Zip share price has plunged 87% over the past 12 months and is down 79% year to date.
Based on today's price, Zip presides a market capitalisation of around $6.15 million.
