Interactive Brokers (IBKR) saw its stock price plummet 7.20% in pre-market trading on Friday, as the financial sector faces a widespread selloff triggered by economic concerns and the impact of newly announced tariffs. The sharp decline in IBKR's stock price reflects growing investor anxiety about the potential effects of a weakening economy on brokerage firms and banks.

The selloff in financial stocks was sparked by the announcement of far-reaching tariffs, which were higher than many Wall Street analysts had anticipated. This move has exacerbated existing worries about weak economic growth and the possibility of a recession. While brokerage firms like Interactive Brokers are not directly affected by tariffs, they face significant indirect consequences as the broader economy slows down. The KBW Nasdaq Bank Index fell 9.9% in the previous session, indicating the severity of the situation for financial stocks.

For Interactive Brokers and other brokerage firms, the economic uncertainty poses several risks. A potential recession could lead to reduced trading activity, decreased use of margin loans, and lower fees generated from assets under management. Additionally, if the equity market correction deepens, there's a risk of diminished revenue from trading and a potential slowdown in new client acquisitions. As investors reassess their outlook for the financial sector, Interactive Brokers' pre-market plunge aligns with the broader trend seen across bank and brokerage stocks, with some peers like Robinhood Markets also experiencing significant drops. The company's performance in the coming weeks will likely depend on how economic conditions unfold and whether fears of a recession materialize.