Unfortunately, this week's trading is wrapping up with a whimper as the S&P/ASX 200 Index (ASX: XJO) cops a big sell-off this Thursday. At the time of writing, the ASX 200 has lost a meaty 1.91% and is back down to around 8,150 points.
But let's talk about what's happening with the Zip Co Ltd (ASX: ZIP) share price.
If you thought the slide on the broader markets was bad, wait until you see what's happening with Zip stock. This buy now, pay later (BNPL) share closed at $3.12 yesterday afternoon. But this morning, those same shares opened at just $2.95 before falling to their present $2.88 level. That's a fall worth 7.7%.
It was even worse earlier today when Zip shares fell as low as $2.84 apiece, a crash worth a nasty 8.97%.
So why does the Zip share price appear to be getting singled out for punishment this session?
Why is Zip stock getting slammed today?
Well, to kick things off, it's unlikely that Zip's share price woes have anything to do with the company itself. There has been a piece of ASX news out from Zip today but it's just some routine ASX paperwork and unlikely to be the reason why Zip shares are slumping today.
A far more likely explanation for Zip's share price plunge is the rout we've just seen over on the American stock markets this morning.
The American markets had a shocking Wednesday session in the early hours of this morning (our time). The Dow Jones Industrial Average (INDEXDJX: .DJI) lost a horrid 2.58%, while the S&P 500 Index (INDEXSP: .INX) lost 2.95%. But the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) was singled out for punishment, tanking by 3.56%.
The catalyst for these drops appears to be a warning from the US Federal Reserve that the markets shouldn't expect as many interest rate cuts next year as what they had pencilled in.
As an ASX tech stock, Zip is highly sensitive to US markets, particularly the tech-focused Nasdaq. As such, it's not too surprising to see investors bail out of the Zip share price en masse today.
Zip isn't the only tech stock getting a beating either. Today, we're also seeing big falls for shares like Megaport Ltd (ASX: MP1) and Life360 Inc (ASX: 360).
Zip share price snapshot
Even so, Zip investors don't have too much to complain about. Despite today's big fall, the Zip share price remains up a massive 366% over 2024 alone. Its gains stretch to 388% over the past 12 months:
Let's see how this BNPL stock ends the year.
