Why Roblox Shares Are Getting Hammered

Roblox Corp RBLX shares are trading lower by 7.88% to $38.48 during Wednesday's session. Stocks across sectors are trading lower following rate hike comments from Fed Chair Powell.

Higher interest rates can impact consumer spending patterns. When borrowing becomes more expensive, individuals and families may have less disposable income to spend on discretionary items like in-app purchases or virtual goods in the case of Roblox.

This could potentially lead to a decrease in revenue for Roblox if its user base reduces spending.

See Also: Disney Looks To Rope In Famed TV Producer Ryan Murphy From Netflix

What Happened?

During the House Financial Services Committee session on Wednesday, Federal Reserve Chair Jerome Powell emphasized the distinction between the pace of interest rate movements and the prevailing level of interest rates.

Powell justified the decision to pause in June by highlighting the considerable magnitude and rapidity of interest rate hikes implemented by the Federal Reserve in the past year.

According to the CME Group FedWatch Tool, investors currently assign a 79% probability to a 25-basis-point increase in the Federal Reserve rate in July. This reflects an increase from the 62% probability recorded last week...Read More

According to data from Benzinga Pro, RBLX has a 52-week high of $53.88 and a 52-week low of $25.32.