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The Macroeconomic and Geopolitical risk factors

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The shares of ChargePoint Holdings Inc. (CHPT) was down this week. According to statistics from S&P Global Market Intelligence, the electric vehicle (EV) charging company’s stock was down around 6.6% from the end of last week coming into Friday’s market start.

While no new business-specific news appears to have sent the stock of CHPT down, the market has been assessing rising macroeconomic and geopolitical risk concerns. Investors are fleeing equities in response to looming uncertainty and the EV charging company’s stock price is plummeting as a result.

Inflation is high and recent macroeconomic conditions have made investors more risk adverse. To make matters worse, the Federal Reserve is expected to raise interest rates further this year in the goal of bringing inflation under control. Rising interest rates normally make growth equities more difficult to invest in and there are fears that even large rate rises may not be enough to keep inflation under control. This week, the market is also processing current events in the Russian-Ukraine conflict.

In addition to situational signs and statements from Russian authorities implying that military measures might escalate to new heights, Russia has shut off the gas supply to Poland and Bulgaria as part of its demand that “unfriendly nations” pay in rubles for gas. Much of Europe’s oil and gas comes from Russia and the thought of critical supplies being cut off would have enormous consequences for the region and the global economy. While catalysts that shift consumption away from oil and natural gas and toward electric and renewable energy sources may help CHPT in the long run, the disruptions are causing its stock to drop in value in the short term.

Earnings from well-known growth businesses may have a rippling effect on other stocks valuations and there’s a good probability that Amazon’s recent first-quarter results could cause additional volatility for growth stocks in the near future. The company’s first-quarter report showed a minor sales shortfall and a loss per share that was substantially bigger than expected and the results might impair market enthusiasm for other equities with forward-looking prices. On Thursday, it was also revealed that the US economy unexpectedly fell 1.4% year over year in the first quarter and the drop in GDP will likely be a major role in the market mood moving forward.

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