What happened
Shares of Ford Motor Company (F 1.54%) closed lower on Wednesday, amid a broad market decline after Federal Reserve Chairman Jerome Powell shared significant concerns about risks to the U.S. economy in the months ahead.
Ford's shares ended the session at $4.72, down 5.2% from Tuesday's closing price.
So what
Stocks traded lower on Wednesday following a speech by Powell, in which he said that the outlook for the U.S. economy is "highly uncertain and subject to significant downside risks." Powell said that the U.S. government may need to spend more to support the economy's recovery from the downturn that has been induced by measures to slow the spread of the COVID-19 virus.
Ford has been preparing its U.S. factories to restart, beginning next Monday. Image source: Ford Motor Company.
It's not hard to see why those comments might have concerned auto investors. Ford and other automakers are gearing up to restart their North American factories next week, after an unprecedented shutdown that began in mid-March. Cars, trucks, and SUVs will soon be flowing to America's new-car dealers again -- but as of right now, it's far from clear how many consumers will show up to buy them.
It's also not entirely clear what the consumers who do show up will want to buy. Auto sales in April were only about half of year-ago levels, with pickup trucks showing strength. But that may not mean much: As many in the industry have noted, sales of pickup trucks are normally strongest in the areas of the U.S. that were hit by the virus later in the month.
Now what
Where does that leave things now? Auto investors will be watching closely next week, when Ford and its Detroit rivals restart their U.S. factories. Will the process go smoothly? Will Ford and the other automakers be able to keep workers safe while the pandemic lingers? A lot will ride on the answers to those questions.
