Why Airline Stocks Are Falling Today
Thursday is a miserable day on Wall Street, and airline stocks are caught up in the turbulence. Shares of United Airlines Holdings (NASDAQ: UAL), American Airlines Group (NASDAQ: AAL), JetBlue Airways (NASDAQ: JBLU), and Spirit Airlines (NYSE: SAVE) all traded down as much as 5% on the day, and shares of Delta Air Lines (NYSE: DAL) and Southwest Airlines (NYSE: LUV) weren't far behind.
A day after stocks rallied after the Federal Reserve hiked rates, markets on Thursday gave all of those gains back. The Dow Jones Industrial Average fell as much as 1,000 points midday as investors seemingly reconsidered the challenge the Fed faces in trying to control inflation without sending the economy into a recession.
For airline stocks, the thought of a slowdown could not come at a worse time. The industry was hit hard by the pandemic, and had hoped to use the 2022 travel season to replenish its cash reserves and repair bruised balance sheets. Based on airline commentary during earnings season, demand seems to be holding up despite inflationary pressures, but the prospect of a recession so soon after the pandemic-related slowdown is a reason for investors to be cautious about buying into the sector.
Source Fool.com
