The Block Inc (ASX: SQ2) share price is having a tough run on the market today.
Block shares are tumbling 6.13% to $93.975. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.15% in the red today.
Let’s take a look at what is going on with the Block share price.
What’s happening to Block?
Block is not the only ASX buy now pay later (BNPL) share sliding today. Zip Co Ltd (ASX: ZIP) shares are 1.85% in the red, while the Sezzle Inc (ASX: SZL) share price is falling 3.65%.
BNPL shares including Block appear to be following in the footsteps of their US counterparts overnight.
Block’s New York Stock Exchange listing Block Inc (NYSE: SQ) fell 5.54% overnight. Similarly, the shares of Affirm Holdings Inc (NASDAQ: AFRM) plunged 6.5% overnight.
Block is being targeted by well-known short seller Hindenburg Research, as my Foolish colleague James reported today.
Further, speculation on future rate rises in the USA could also be weighing on BNPL shares.
The Consumer Price Index lifted 0.1% month on month in March 2023, data from the US Bureau of Labor Statistics released overnight shows. However, this was less than the 0.4% rise in CPI in February.
Since March last year, CPI has lifted 5%. However, this was the “smallest 12-month increase since the period ending May 2021”.
Commenting on this data, US President Joe Biden noted “inflation is still too high”. He said:
While inflation is still too high, this progress means more breathing room for hard-working Americans â with wages now higher than they were 9 months ago, after accounting for inflation.
Given inflation is still rising, multiple economists are tipping the USA Federal Reserve to raise rates further. In a research note today, ANZ economist John Bromhead said:
Equity markets softened after US inflation data confirmed expectations that the Fed is likely to lift rates 25bp in May.
Markets are aligned in the view that will be the peak of the cycle, but views differ as to when rates will start to fall.
Oxford economics chief US economist Ryan Sweet also tipped the Fed would lift rates by 25 basis points in May and June before pausing for the rest of the year.
Block share price snapshot
The Block share price has fallen 43% in the last year and 14% in the past month.
Block has a market capitalisation of about $2.7 billion based on the current share price.
