QS - Why Electric Vehicle Stocks Are on Fire Today
Shares of electric vehicle manufacturers and suppliers surged higher on Thursday as traders rotated back into high-growth and high-risk stocks. Investors have had an evening to digest the Federal Reserve's announcement of a 25 basis point increase in the federal funds rate -- a smaller bump than its previous recent increases.
The EV industry's big mover of the morning was QuantumScape (NYSE: QS) , which popped by as much as 18%, but Rivian Automotive (NASDAQ: RIVN) also jumped 12.1%, Lucid (NASDAQ: LCID) rose 10%, and Canoo (NASDAQ: GOEV) rose 7.4% at its peak. Shares of the stocks were up 14.9%, 8.2%, 6.8%, and 7.4% respectively at 11:40 a.m. ET.
Thursday's share price moves are clearly driven by falling interest rates in the markets and investors moving back into riskier assets. According to Bloomberg, the yield on the 10-year U.S. Treasury bond fell by 6 basis points Thursday to 3.36% -- and it's down by 52 basis points in the last month. Lower rates on that benchmark both help the economy grow and make it less expensive for borrowers to purchase vehicles.
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Why Electric Vehicle Stocks Are on Fire Today