Why Ford Stock Hit the Brakes Today
Ford Motor (NYSE: F) stock slumped this morning and was down 6.6% as of 10:35 a.m. ET. Investors in the legacy automaker found not one but three reasons to be worried today, and it goes beyond the market sell-off. Interest rates are soaring, gas prices are surging, and Ford just halted deliveries of a popular electric vehicle (EV).
Growth can be hard to come by for automakers in a rising interest rate environment. With inflation hitting 40-year highs last week, the Federal Reserve just increased its benchmark interest rate by a whopping 0.75 percentage point, the biggest such hike since 1994. As interest rates rise, debt becomes costlier for auto companies, while buying cars on loans becomes costlier for consumers. It's a double whammy.
To top that, gas prices shot up again today. The pain at the pump will likely force many to postpone or cancel car purchases.
Source Fool.com
