Nikola Corp NKLA shares are trading lower by 8.1% to $0.77 Wednesday afternoon. Various sectors are witnessing a downturn Wednesday, potentially influenced by increasing Treasury yields and profit-taking following December 2023 strength. Additionally, uncertainties surrounding upcoming economic reports and Federal Reserve speeches are contributing to this trend.
Investors are also anticipating confirmation on projected rate adjustments and closely monitoring the Federal Reserve's December meeting minutes along with job-related data.
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The Significance of Climbing Yields
When it comes to growth stocks like Nikola, their value is often determined by anticipated future cash flows. However, as interest rates increase, the discount rate used in evaluating these cash flows also goes up.
This higher discount rate can reduce the current value of expected cash flows, affecting how investors perceive the value of stocks focused on growth.
According to data from Benzinga Pro, NKLA has a 52-week high of $3.71 and a 52-week low of $0.52.
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