What happened

Shares of electric-truck start-up Nikola (NASDAQ:NKLA) were trading lower on Thursday morning, amid a broad market decline as investors digested sobering reports of increasing numbers of COVID-19 cases from parts of the United States that reopened early.

As of 10:30 a.m. EDT, Nikola's shares were down about 6.4% from Wednesday's closing price.

So what

U.S. coronavirus cases are still rising: There are now more than 2 million confirmed cases, with rising numbers in large states -- including Florida, Texas, and California -- that have moved to reopen their economies in recent weeks. 

For markets generally, the concern should be obvious to investors: If economic activity in the U.S. has to be re-restricted, or if consumers decide to self-restrict on continued virus fears, that will be bad news for a long list of companies. 

A Nikola electric tractor-trailer truck.

Nikola will launch its first electric heavy truck late next year. But the COVID-19 pandemic could still hurt it in the near term. Image source: Nikola.

That said, a rising wave of new infections won't necessarily affect Nikola, which is still a year or more away from shipping its first products. But falling consumer confidence could affect the number of companies willing to pony up cash deposits for its electric heavy trucks, and the number of individuals willing to order the company's promised electric pickup truck.

Now what

More broadly, the rising number of coronavirus cases is one in a series of reality checks for investors, including auto investors who have jumped on Nikola's shares over the last week. The reality for Nikola is that right now, it's a company with no revenue that looks likely to face stiff competition when it brings its products to market over the next couple of years. 

As always, trade carefully.