Why Electric Vehicle Stocks Plunged and Then Popped Today
The start of Monday's trading session was one of the strangest we've had in a long time. Obviously, Silicon Valley Bank's collapse happened on Friday, and crypto-focused Signature Bank was taken over by the Federal Deposit Insurance Corp. on Sunday -- events that sent the world of banking into a tailspin. But there was some resolution on Sunday evening as the Federal Reserve, Treasury Department, and FDIC came together to guarantee that the depositors of those two institutions won't lose money.
The full impacts from the last week of panic, failure, and government intervention haven't been felt yet, but investors are reacting, and those responses are not restricted to the financial sector. Early in Monday's session, shares of electric vehicle start-up Canoo (NASDAQ: GOEV) plunged 5.2%, NIO (NYSE: NIO) was off 5.6%, and Lucid Group (NASDAQ: LCID) was off 6.9%. But by 12:15 p.m. ET, their shares were up 1.7%, up 0.7%, and down 0.9%, respectively. But why did those shares take such a roller-coaster ride?
Let's start with the declines that many EV stocks suffered in early trading Monday. Many risky stocks, including many bank stocks, were falling at that point, despite the federal government stepping in to backstop the deposits at the failing banks. The fear was still that contagion would spread and other banks would go under.
Source Fool.com
