Biden’s tariffs on Chinese imports boosted these affected stocks

Biden’s tariffs on Chinese imports boosted these affected stocks

It’s not just meme stocks that are seeing a resurgence this week.

Affected clean energy stocks have risen this week. The iShares Global Clean Energy exchange-traded fund, which tracks sectors from renewable electricity to semiconductors to solar energy, has gained about 3%. Shares of Plug Power have risen 33%, shares of Enphase Energy have gained 8% and shares of NextEra Energy have added 4%.

Behind the rally? President Joe Biden is raising tariffs on $18 billion of Chinese imports across sectors including steel and aluminum, electric vehicles, solar cells and medical products. The new rates range from 100% on electric vehicles to 50% on solar components to 25% for other sectors, CNN’s Kayla Tausche reports.

“China cannot be the only country producing the clean technology for the world that we need,” said a senior Biden administration official. “We need to diversify, not concentrate, the production of our most critical goods and technologies. … That’s the kind of dynamic that we think will create a resilient supply chain and clean technology.”

Clean energy stocks were hit last year by supply chain angst and skyrocketing interest rates, which drove up borrowing costs for growing companies trying to raise capital. Hopes that an influx of US government spending on climate solutions would help revive the sector have also been dashed.

Higher rates also tend to make it harder for consumers to switch to using clean energy, as sources like residential solar systems can cost thousands of dollars and require loans. While some investors hoped that the Federal Reserve would start cutting rates this year, the central bank kept rates at a 23-year high.

Some investors warned that while tariffs could continue to boost clean energy stocks, the recent rally was not driven by simply improving the base. The surge was also partly due to traders’ willingness to take on more risk in their portfolios as stocks continued to hit record highs, they said.

“Post-tariff investment thesis in this sector is better than before. But that doesn’t mean that all these companies are out of the woods,” Steve Sosnick, chief strategist at Interactive Brokers, told CNN.

Wall Street’s big risk appetite was in full effect this week. Shares of meme stocks like GameStop and AMC Entertainment have been swinging wildly after the Roaring Kitty X account run by Keith Gill, a trader who helped spark the 2021 meme stock craze, went live for the first time in three years. Meme stocks are stocks of companies that tend to see big swings based on their popularity on social media rather than their fundamentals.

The Dow briefly topped 40,000 for the first time but ended the day lower
The Dow Jones Industrial Average crossed the 40,000 mark Thursday for the first time, boosted by upbeat inflation reports, my colleague Nicole Goodkind reports.

The luxury index briefly crossed a key threshold in morning trade before falling back below the line in the afternoon to close at 39,869, down 38 points, or 0.1%.

All three major indexes closed lower on Thursday. The S&P 500 ended the day down 0.2% and the Nasdaq Composite down 0.3%.

Markets rose to new highs on Wednesday after the latest Consumer Price Index showed a period of calm for the first time in months, sparking hopes that the Federal Reserve could start cutting interest rates as soon as September.

On a monthly basis, inflation reports showed that prices rose 0.3%, a slower pace than the previous two months, according to the Bureau of Labor Statistics. Economists had expected a monthly increase of 0.4%, according to the FactSet consensus estimate.

Another important data point added to the sentiment: April retail sales came in significantly weaker than expected, suggesting that consumers are pulling back on spending that drives the economy. Spending surpassed the 0.4% increase projected by economists.

“This is the first good CPI report in four months and the market is loving it,” said Gary Pzegeo, head of fixed income at CIBC Private Wealth US. “Taken [together with retail sales] this supports the Fed’s rate cut in the fall. The market discounted the cut in September and has moved to price in the second cut by December.”

Destructive hacks reveal weaknesses in America’s health care system
A pair of recent ransomware attacks have crippled computer systems at two major American healthcare firms, disrupting patient care and exposing fundamental weaknesses in the US healthcare system’s defenses against hackers, my colleague Sean Lyngaas reports.

In both cases, federal officials and private cyber experts scrambled to try to limit the damage and get computers back online. But the cascading effects of the hack, with ambulances diverted from hospitals and pharmacies unable to process insurance, have underscored for some US lawmakers, senior Biden administration officials and policy experts that the health care system is unprepared for the ripple effects of cyberattacks. and require new safety regulations.

Healthcare lags behind other industries, such as large financial institutions and energy providers, when it comes to IT security, according to some experts.

“Industry has successfully demanded voluntary cybersecurity for years — and this is what we got,” Joshua Corman, a cybersecurity expert who has focused on the health sector for years, told CNN.

Senator Ron Wyden, the Oregon Democrat who chairs the finance committee, told CNN that “every new devastating hack hammers home the need for mandatory cybersecurity standards in the healthcare sector, especially when it involves the largest companies that rely on millions of patients for care and medicine. .”

Without action, the senator said, “patients’ access to care and their personal health information will be compromised and compromised by hackers over and over again.”

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