Earlier in December, Lucid Motors (NASDAQ: LCID) stock experienced something of a renaissance as it rallied from $2.09 to $2.76 on December 17. The upswing was driven by a wider resurgence for electric vehicle (EV) companies but also by several LCID-specific tailwinds.
Specifically, after BlackRock (NYSE: BLK) shocked investors by dumping more than 2 million Lucid shares, the company’s main investor and backer, the Saudi Public Investment Fund (PIF), provided a $1 billion injection.
The news that the production of the EV maker’s new model, Lucid Gravity, is underway also spared substantial optimism for investors used to seeing the line go almost exclusively down.
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On December 18, all the positive momentum built across several weeks dissipated almost instantaneously, and LCID stock crashed 8.33% in a day to its latest closing price of $2.53.
Why Lucid stock price is collapsing
While a Lucid stock price collapse is hardly a novel concept, the latest downturn cannot be attributed to a particular fault of the EV maker.
Indeed, December 18 witnessed a veritable stock market bloodbath as the Federal Reserve – following the December Federal Open Market Committee (FOMC) meeting – unveiled a set of unpleasant surprises to investors
Though America’s central bank cut interest rates by the expected 25 basis points (BPS), it simultaneously warned there would be fewer reductions in 2025. The Fed also reignited fears of rampant inflation as it revised its forecast for next year from 2.1% to 2.5%.
The majority of assets reacted violently. Along with the aforementioned stock market plunge, gold collapsed more than 1%, and the cryptocurrency market swiftly erased $300 billion from its market capitalization, though it, by press time, reduced the losses to approximately $100 billion.
Finally, as indicated by the subsequent performance of assets that are traded 24/7 and by the Thursday pre-market – including LCID stock, which is up 1.19% in the extended session – it is unclear if the bloodbath will have a profound impact.
Featured image via Shutterstock
