ChargePoint Holdings Inc CHPT shares are dancing 19.6% higher to $2.87 at the opening bell. Stocks across sectors are on the rise thanks to the overall market strength post the Fed’s decision to leave rates untouched. Most Fed officials are eyeing rate cuts in 2024-2026.
Just like a growing plant needs water and sunlight, ChargePoint, like many companies, might need to raise capital in the future for new branches, research experiments, or strengthening its roots. If interest rates are lower, the price tags on borrowing are cheaper. This means ChargePoint could potentially borrow money at a lower rate, snipping off their cost of capital like a gardener pruning a rose bush.
When borrowing costs are down, the green light is on for more investments in expanding their charging network or nurturing new technologies. This could positively impact their growth, like a surge of energy in a tired runner’s legs during the final lap.
The buoyancy of clean energy stocks may also be fueled by the afterglow of the COP28 climate summit, which saw commitments to shift away from fossil fuels.
What’s the Buzz About the Fed?
The Federal Reserve opted to keep the federal funds rate steady at 5.25%-5.5%, carrying on the beat from the previous two meetings. This move likely brings the curtain down on the phase of escalating rates that started in March 2022.
Though acknowledging a reduction in inflation over the past year, the Fed is still keeping a wary eye on its elevated level. It is emphasizing its determination to nudge it back to the 2% target.
The Fed also reaffirmed its commitment to shaping future policy decisions based on incoming data.Read More
Take a Peek: Bitcoin, Ethereum, Dogecoin Up On Fed’s Rate Cut Projection
According to data from Benzinga Pro, CHPT has savored a 52-week high of $13.65 and a 52-week low of $1.79.