SoFi Technologies, Inc. (NASDAQ: SOFI) witnessed another month of success as its stock price soared by 20.2% in June. This comes after a previous gain of 11.4% in May. As of July 5, SoFi’s stock had surged by 83% since the beginning of the year, reaching a trading price of $8.45 per share.
The month of June proved to be highly favorable for the overall market, as the S&P 500 recorded a 6.5% increase, the Dow Jones Industrial Average saw a gain of 4.6%, and the Nasdaq Composite jumped by 6.6%.
Key Catalysts
SoFi encountered two major catalysts that contributed to its success in June. Firstly, the passage of the debt ceiling played a crucial role. Although the deal had been agreed upon in late May, it was officially approved by Congress on June 1. This development was particularly relevant to SoFi because one of the provisions of the agreement was the end of the moratorium on student loan repayments. This moratorium had been in effect since the beginning of the pandemic and had been extended multiple times. As a major student loan lender, SoFi had been actively advocating for this provision and even filed a lawsuit against the federal government. With the passage of the debt ceiling, SoFi chose to drop its lawsuit, even though it had suffered an estimated loss of $300 million in revenue due to the moratorium.
The second triumph for SoFi in June was the Federal Reserve Board’s decision to refrain from raising interest rates for the first time in over a year. This pause in rate hikes, albeit temporary, was driven by a consistent decline in the inflation rate and other favorable economic factors. The Fed’s decision was generally viewed as positive news for the overall economy.
In addition, a recent ruling by the Supreme Court had a significant impact on SoFi’s stock price. The Court, in a 6-3 vote, struck down President Joe Biden’s federal student loan forgiveness proposal. Initially, the stock price surged upon the news, triggering circuit breakers that temporarily halted trading. However, the stock price later retraced some of its gains as the market had likely anticipated the conservative nature of the court’s decision.
Mary Lee is a freelance writer and journalist based in Toronto, Canada. She holds an M.S. degree in business and economic journalism from Columbia University’s Graduate School of Journalism in New York and a certificate in digital marketing from the University of Toronto.
