SoFi Technologies Inc. (SOFI) experienced a significant downturn in the stock market, plummeting 5.02% during Tuesday's trading session. This sharp decline comes in the wake of Morgan Stanley's decision to substantially reduce its price target for the fintech company.

Morgan Stanley, a prominent financial services firm, cut its price target for SoFi from $13 to $6, while maintaining an Underweight rating on the stock. The drastic reduction reflects growing concerns about SoFi's potential vulnerability in the current economic climate. Analysts at Morgan Stanley suggest that a slowdown in consumer spending, particularly in light of recent policy changes, could significantly impact SoFi's business model.

Adding to the pessimistic outlook, Schwab Network commentator Kevin Green highlighted the potential for a "lack of liquidity" in the credit market. This situation could lead to reduced lending activities not only for SoFi but also for its peers in the fintech sector. As a company that heavily relies on consumer lending and financial services, SoFi appears particularly susceptible to these market conditions, which likely contributed to the stock's dramatic fall.