3 Small-Cap Financial Services Stocks to Buy Amid Tariff Uncertainty

Market Overview - Last week's market performance was negatively impacted by uncertainty over tariffs, leading to the S&P 500 Index posting its worst weekly performance since September 2024, with a decline of 3.1% [1][2] - The Nasdaq Composite fell 3.8%, entering correction territory, while the Dow Jones declined by 2.5%. Small-cap stocks, represented by the Russell 2000, experienced the steepest decline at 4.3% [2] Financial Services Sector - The Financial Services sector among U.S. small-cap stocks was one of the top five worst performers last week, yet some stocks managed to perform positively [3] - Economists and policymakers view tariffs as a potential factor that could increase prices for U.S. businesses and consumers, which may slow economic growth over time [5] - Small-cap stocks are more sensitive to domestic economic conditions compared to large-cap companies, making them vulnerable to economic performance fluctuations [6] Investment Opportunities - Three small-cap financial services stocks that showed resilience and ended the week positively are Medallion Financial Corp. (MFIN), OFS Capital Corporation (OFS), and Finward Bancorp (FNWD) [3][8] - Medallion Financial reported total revenues of $213.9 million in 2024, a 7% increase year-over-year, and is expected to see a 5.3% sales increase this year [12] - OFS Capital's fair value of its debt investment portfolio was $224.2 million, and the stock gained 7.6% last week, indicating strong demand for specialized financing [15][17] - Finward Bancorp's revenues grew 9% year-over-year to $71.1 million in 2024, driven by a one-time gain on real estate, and the stock gained 3.7% last week [19][21]