What happened

The share prices of a handful of automakers were rising today after a new Wall Street Journal report today indicated that some Federal Reserve officials may be wary of continued aggressive interest rate hikes. Investors across all sectors are keeping a close eye on what the Fed will do at its next meetings, which will be in November and December, and are hoping that the pace and size of rate increases will slow down. 

Additionally, Rivian's (RIVN -4.60%) stock is likely gaining today because the company said that it has completed repairs on most of its recently recalled vehicles. As of 3:08 p.m. ET, Rivian was up by 2.8%, Ford (F -3.30%) gained 3.1%, and Nio (NIO -7.85%) was up by about 0.5%.

So what 

The Journal said today that while the Fed is likely to raise the federal funds rate by an additional 75 basis points at its upcoming meeting next month, officials might do a smaller rate increase at its December meeting. 

A vehicle door in a factory.

Image source: Getty Images.

The report said that some Federal Reserve officials want to slow down the pace of interest rate increases, as well as the size of the increases, so that there's more time to see how they impact the economy and inflation. The Fed may or may not slow down its interest rate hikes starting in December, but investors jumped on the possibility that some officials are at least considering the idea. 

That caused market indexes to pop today, with the S&P 500 rising 1.8% and the tech-heavy Nasdaq Composite increasing 1.7% by late afternoon. 

Nio and Rivian stocks rose along with the broader market today as investors hoped that the Fed won't end up tipping the U.S. economy into a recession. The electric vehicle (EV) industry has already faced significant headwinds -- including rising material costs and a chip shortage -- and a significant slowdown of economies around the world would hurt these two small EV start-ups as they try to ramp up vehicle production. 

Rivian's stock is likely also making some gains today after the company's founder and CEO, RJ Scaringe, said at a tech conference earlier this week that a "significant majority" of the 12,000 vehicles Rivian recalled this month are already fixed. 

Ford's share price was rising today, likely based on the Journal report, and investors may have been especially pleased with the idea of the Federal Reserve potentially slowing down rate hikes after the automotive stock fell yesterday as investors processed comments from a Fed official indicating that more rate hikes could be on the way. 

Now what 

Automotive stocks are likely to remain volatile in the short term as investors continue to process news about inflation, the economy, and interest rate increases. So while the share prices of Rivian, Ford, and Nio were rising today, investors should hold onto those gains lightly. 

Investors will get a clearer picture of how the companies are doing when they report their quarterly financial results, which will be on Oct. 25 for Ford and Nov. 9 for Rivian and which are estimated to be released on Nov. 8 for Nio.