Shares of Wolfspeed (WOLF -6.71%) are spiking on Wednesday. The chipmaker's stock was up 17.2% as of 2:21 p.m. ET, as the S&P 500 (^GSPC 1.03%) and Nasdaq Composite (^IXIC 1.20%) were up 0.2% and 0.4%, respectively.
Wolfspeed's stock is recovering somewhat today after losing nearly 60% this month. The stock may be getting a boost from President Trump as he continues to pressure the Federal Reserve to lower interest rates.
Trump says it's time
The payroll processing firm ADP reported its private-sector job creation numbers on Wednesday. The 37,000 jobs added in May were the lowest figure reported since March 2023 and significantly lower than the Dow Jones forecast of 110,000. While the ADP report is important, the nonfarm payrolls count from the Bureau of Labor Statistics, released in two days, is the more closely watched metric.
Regardless, President Trump took to Truth Social to call on Federal Reserve Chairman Jerome Powell to lower interest rates, saying, "Powell must now LOWER THE RATE. He is unbelievable!!!"
Image source: Getty Images.
While the president does not have the legal authority to direct the Fed to lower rates, and Powell has fiercely maintained its independence, it's not impossible that the continued pressure in the face of poor hiring numbers will lead to rate cuts. It appears some investors are hoping that will be the case.
Wolfspeed could benefit from lowered rates
The struggling chipmaker is heavily indebted and teetering on the brink of bankruptcy. Lowered interest rates could allow the company to refinance its debt at a lower rate and possibly avoid such a fate. However, while the possibility exists, it seems unlikely to me that rates would lower enough or in time to save Wolfspeed given its dire situation. I would avoid this stock.
