Solar, clean energy stocks rally as tame inflation data lifts rate cut hopes

Shares of solar and alternative energy companies posted broad gains on Thursday, boosted by cooler than expected inflation data that raised hopes the Federal Reserve will start lowering interest rates sooner rather than later.

U.S. consumer prices fell for the first time in more than four years, and core CPI – which excludes volatile food and energy prices – rose just 0.1%, sparking a rally in interest rate-sensitive industries.

Solar stocks were led by Sunnova Energy (NOVA) +19% and Sunrun (RUN) +15.4%, with strong showings also coming from Maxeon Solar (MAXN) +14.2%, Array Technologies (ARRY) +9.3%, Emeren (SOL) +8.9%, Canadian Solar (CSIQ) +7.9%, SunPower (SPWR) +7.1%, Enphase Energy (NASDAQ:ENPH) +4.6%, JinkoSolar (JKS) +4%, First Solar (FSLR) +2.1%.

Among other clean energy names, big gainers included Stem (STEM) +11.3%, Clean Energy Fuels (CLNE) +8.9%, Plug Power (PLUG) +8.9%, FuelCell Energy (FCEL) +8.1%, TPI Composites (TPIC) +6.4%, Fluence Energy (FLNC) +5.5%, Westport Fuel Systems (WPRT) +5.2%, Bloom Energy (BE) +4.4%, Ballard Power (BLDP) +4.2%.

Shares of power producers also finished mostly higher, as lower Treasury yields make the dividend-oriented utilities sector more attractive to fixed-income investors; among the largest names, winners included Dominion Energy (D) +3.8%, American Electric Power (AEP) +2.9% and NextEra Energy (NEE) +2.4%.

ETFs: (TAN), (FAN), (ICLN), (QCLN), (PBW), (PBD), (ACES), (CNRG), (ERTH), (SMOG), (XLU)

The solar sector has suffering for months with low demand and high interest rates, and analysts at BMO Capital said they expect the coming earnings season will find most solar companies still struggling.