Lyft Shares Rise as โInflation Data Fuels Rateโ cut Hopes
NEW YORK, September โฃ13, 2023 – Lyft (LYFT) shares are moving higher Wednesday, building on a year-to-date โsurge, as cooler-than-expected wholesale inflation data strengthensโ expectations for an โinterest rate cut by the Federal Reserve. The stock was trading atโ a 52-week high of โค$19.42 per share as of market close.
Lyft’s shares are known for volatility, having experienced 24 โmoves โขof greater than 5% in the last year. Today’s increase, though, is viewed by the market asโข meaningful, though not fundamentally altering the long-term perception of the business.
The rally follows theโฃ release of the U.S. Bureau of Labor statistics’ Producerโ Price Index (PPI) report, which revealed a 0.1% โdecline in wholesaleโ inflation for August -โ a surprise drop comparedโ to the anticipated 0.3% increase. This cooling inflation has โคconsiderably boosted market predictions of โคa shift in the central bank’s monetary policy.
The CME FedWatch Tool now indicates a 90% probability of a 25-basis point rate cut at the Federal Reserve’s upcoming meeting. โขLower interest rates generally reduce borrowing costs for companies and can stimulateโ economic activity, factors investors see as positive for โคgrowth-orientedโ tech stocks like Lyft.
Year-to-date, โขLyft has increased 42.2%. However, long-term investors have experienced mixed results; a $1,000 investment in Lyftโ shares fiveโฃ years ago would currently be โขvalued at $642.24.
Five days prior, on Septemberโ 8th, โthe stock gained 4% following the release of the โฃinitial PPI report.
