MP - Why Shares of MP Materials Sank 22% in September
Falling precipitously, the S&P 500 lost more than 9% in September as investors wrestled with rising inflation, interest rate hikes, and growing geopolitical tensions. Take all of those issues and sprinkle in a couple of others, and it becomes glaringly obvious why shares of rare earth elements company MP Materials (NYSE: MP) lost even more ground.
According to data from S&P Global Market Intelligence , shares of MP Materials fell 22% in September.
MP Materials is a leading producer of rare earth elements, critical components found in electric vehicles (EVs). This means the growing interest in EVs is a tailwind benefiting the company.
Last month, however, the market's enthusiasm pumped the brakes on whether the Federal Reserve would raise interest rates -- which it did in late September. With higher interest rates, many speculated that auto sales would face pressure. Pair this with the overriding sense that a recession may be around the corner, and investors surmised that consumers looking to pinch pennies during an economic downturn would probably not be in the market for purchasing a new EV.
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Why Shares of MP Materials Sank 22% in September