A number of popular hydrogen stocks are enjoying strong early growth in the markets today. The likes of Plug Power (NASDAQ:PLUG), FuelCell Energy (NASDAQ:FCEL) and Bloom Energy (NYSE:BE) are each up slightly on an otherwise dreary day for stocks.
What’s going on with hydrogen companies to start the week?
Well, these next-generation energy companies seem to be up on no apparent news. That doesn’t mean their jump is meritless, however. Hydrogen companies have been trending all year as one of the few winners of the recent bear market. PLUG is up nearly 4% on the year, even as the S&P 500 and Nasdaq Composite eye losses around 10% and 17%, respectively. BE is the undisputed winner, up a staggering 37% since January. However, not everything is sunny in renewable energy paradise, as FCEL is down on the year, roughly 11%.
Hydrogen has been a point of focus this year as energy costs have risen ceaselessly due to Russia’s invasion of Ukraine. What can we expect out of the battery makers going forward?
Hydrogen Stocks Climb as Inflation Reduction Act Pushes for Clean Energy
Hydrogen companies may be seeing some light stemming from the recently passed Inflation Reduction Act, set to be signed into law this week. The legislation marks the single largest public investment to fight climate change to date and includes a number of incentives for both businesses and private consumers to make the switch towards renewable energy. While electric vehicles (EV) tend to hog most of the emissions-less spotlight, hydrogen has also been a clear winner of the clean energy race.
Additionally, there are some macroeconomic conditions at play worth considering for these battery makers. July inflation came in at 8.5%, below expectations of around 8.7% year-over-year (YOY) price growth. With inflation seemingly beginning to ease, some analysts expect the Federal Reserve to consider stepping off the breaks of its hawkish agenda following two consecutive quarters of falling production.
This would come as a strong sign to high-growth tech and energy stocks that often benefit the most from low interest rates. As such, an area like hydrogen would be primed for a quick pick-me-up.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.