Zip Co Ltd (ASX:ZIP) experienced a significant downturn during Thursday's trading session, with its stock price plummeting 5.02%. This sharp decline comes just days after the announcement of a strategic partnership with GameStop Corp., which failed to buoy investor confidence in the face of broader market pressures.

The recent drop appears to be a continuation of the negative sentiment that has plagued Zip Co over the past week, during which the stock had already fallen 16%. Despite the potentially positive news of becoming GameStop's primary pay-in-installments service in the U.S., investors seem to be responding to wider economic concerns. The ongoing volatility in the market, partly attributed to anticipation surrounding President Trump's tariff announcements, may be contributing to the sell-off in Zip Co shares.

It's worth noting that this recent decline contrasts with Zip Co's overall performance over the past year, which saw a total return of 22.69%, outpacing both the broader Australian market and the Consumer Finance industry. The company has shown signs of financial improvement, reporting a net income of A$5.7 million for the full year, a significant turnaround from the previous year's loss. However, recent leadership changes, including co-founder Larry Diamond stepping down from key roles, may have introduced uncertainty among investors. As Zip Co navigates these challenges, the market will be watching closely to see if the company can leverage its new partnerships and improved financials to regain positive momentum.