By Kanishka Ajmera and Rashika Singh
Jan 22 (Reuters) – U.S. fintech stocks could gain an edge as Washington leans into a more populist, affordability-driven agenda ahead of the November 2026 midterm elections, analysts at Citigroup said in a note.
President Donald Trump’s latest policy push is prompting investors to reassess parts of the financial sector, with his emphasis on affordability potentially opening the door for fintech challengers instead of traditional lenders, the brokerage said.
Companies tied to consumer-friendly credit and small-business services, including buy-now, pay-later providers Affirm and Klarna, and fintech firms SoFi and Block, are among the best positioned to benefit, the bank said. Citi also flagged restaurant technology platform Toast and e-commerce firm Shopify as potential winners.
Traditional lenders rallied after Trump’s return to the White House in 2025 on expectations of a lighter regulatory touch, but his emphasis on affordability could shift the spotlight toward fintech challengers, the note said.
In 2025, SoFi climbed about 70% while Affirm rose more than 22%. Block, however, fell more than 23%, underperforming both its fintech peers and the broader market, with the Nasdaq Composite up about 20.4% over the same period, amid concerns over growth and competition in payments.
“Populism is on the rise as part of the affordability focus as midterms approach,” Citi said, adding that companies offering lower-cost, more user-friendly lending tools or services aimed at small businesses could stand to gain.
Earlier this month, Trump called for a one-year cap on credit card interest rates at 10%, drawing pushback from the banking industry, including JP Morgan Chase CEO Jamie Dimon.
The U.S. president also signed an executive order aimed at restricting large institutional investors from competing with individual homebuyers, reinforcing his affordability-focused agenda which Citi said could help smaller fintechs.
(Reporting by Kanishka Ajmera and Rashika Singh in Bengaluru; Editing by Tasim Zahid)
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