Utilities Rise Amid Trade-War Fears and Renewable Energy Stocks See Mixed Trends

Utilities shares rose as traders moved into defensive sectors due to renewed trade-war fears. Solar-energy stocks were mixed, with Sunrun shares increasing and First Solar falling sharply. The move came after a relief rally last week.

Utilities shares rose as traders sought refuge in defensive sectors amidst renewed fears of a trade war. Solar-energy stocks, however, reacted differently, with Sunrun shares increasing while First Solar (FSLR) experienced a sharp decline. This move came after a relief rally in the previous week.

First Solar closed the most recent trading day at $162.96, down by 1.56% from the previous trading session. This decline lagged the S&P 500's daily loss of 0.11% but outperformed the technology-centric Nasdaq, which decreased by 0.82%. Over the past month, shares of First Solar had gained 10.62%, outperforming the Oils-Energy sector's gain of 4.89% and the S&P 500's gain of 5.17% [1].

The investment community will closely monitor First Solar's forthcoming earnings report, with analysts forecasting an EPS of $2.63, a 19.08% downward movement from the corresponding quarter of the prior year. The company is expected to report quarterly revenue of $1.01 billion, up 0.34% from the year-ago period [1].

Sunrun shares, on the other hand, saw an increase in their stock price. This positive movement is likely due to the U.S. Senate's passage of the latest version of the tax and expenditure bill proposed by President Trump. The bill includes the elimination of the consumption tax on wind and solar energy projects, which is expected to boost investment in the renewable energy sector [2]. The removal of this tax is anticipated to reduce the financial burden on companies involved in renewable energy production, encouraging more businesses to invest in this sector.

The passage of the bill reflects a broader trend towards renewable energy adoption globally. As countries aim to reduce their carbon footprints, the demand for wind and solar energy is rising. The U.S. government's decision to support the renewable energy sector through tax incentives is likely to position the country as a leader in the global transition to clean energy. However, the bill also includes provisions that may pose challenges for the renewable energy sector, such as the phase-out of tax credits for solar and wind energy by 2028 [2].

In summary, while utilities shares rose due to renewed trade-war fears, solar-energy stocks reacted differently. Sunrun shares increased, likely due to the passage of the tax bill in the Senate, while First Solar experienced a sharp decline. Investors should continue to monitor the performance of these companies and the broader market conditions.

References:
[1] https://finance.yahoo.com/news/why-first-solar-fslr-dipped-214503667.html
[2] https://www.ainvest.com/news/solar-stocks-surge-24-senate-eliminates-renewable-energy-tax-2507/