StoneCo Ltd. (NASDAQ: STNE) shares are experiencing a sharp decline, plummeting 9.91% in pre-market trading on Friday. This significant drop follows a 7.26% fall in the previous session, reflecting ongoing investor concerns despite the Brazilian fintech company's recent earnings report.

The steep decline comes in the wake of StoneCo's third-quarter earnings release, which largely met analyst expectations. The company reported an adjusted net profit of 641 million reais, slightly above the IBES estimate of 639 million reais, while recurring revenue hit 3.6 billion reais, exactly in line with projections. However, investors appear to be reacting negatively, possibly due to concerns about future growth prospects or disappointment that the results didn't significantly exceed expectations in a challenging economic environment.

Adding to the downward pressure on StoneCo's stock is the broader market selloff, particularly affecting technology and growth stocks. Major U.S. indices experienced significant drops in the previous session, with investors grappling with mixed corporate earnings and renewed concerns over the labor market. As a fintech company, StoneCo falls into the category of growth stocks that are more sensitive to market volatility and changing investor sentiment, exacerbating its decline amidst the current risk-off market environment.