Shares of solar manufacturer First Solar (NASDAQ:FSLR) fell as much as 10.1% in early trading Tuesday as the market sell-off hit solar energy stocks. However, shares recovered all of those losses and closed the day up 0.4%.
Early in trading today the market fell and oil prices dropped nearly 2% very rapidly. The sell-off hit tech and high-growth stocks, but it also impacted volatile clean energy stocks like First Solar.
One of the fears on the market early was that interest rates will continue to rise, and solar stocks are impacted by that because it makes financing projects more costly long term. But Federal Reserve Chair Jerome Powell said before Congress today that the economy has "a long way" to go before the Fed pulls back stimulus policies.
At the end of the day, there's no reason to change your investment thesis for First Solar. The company is one of the most profitable and best positioned companies in the solar industry, and that's not going to change with a small change in interest rates or economic growth. But investors will want to keep an eye on how quickly interest rates bounce off historic lows because high rates would be bad for the economic viability of solar energy. But we're a long way from that, and the Fed seems intent on keeping interest rates extremely low for the foreseeable future.