Why did the Piedmont Lithium share price plunge on Thursday?

The Piedmont Lithium Inc (ASX: PLL) share price closed 4.59% lower today amid a broad sell-off across Australian and US markets.

Shares of the integrated lithium business closed trading for 93 cents each.

The materials sector was the worst performer on Thursday, with the S&P/ASX 200 Materials Index (ASX: XMJ) losing 2.96%.

Other ASX lithium shares were also not spared from the downturn. Here’s a quick look at how they performed:

• Pilbara Minerals Ltd (ASX: PLS) down 1.37%
• Mineral Resources Limited (ASX: MIN) down 3.12%
• Allkem Ltd (ASX: AKE) down 2.49%

The broader Australian market took a hit too, with the S&P/ASX 200 Index (ASX: XJO) losing 1.84%.

Of course, most of the damage here at home is also reflected in the slide of US markets overnight.

The Nasdaq Composite (NASDAQ: .IXIC) lost 3.36% and made a new five-day low. The S&P 500 Index (SP: .INX) lost a significant amount too, down 2.50%.

Markets are reeling amid comments made by Federal Reserve chairman Jerome Powell overnight. Let’s cover the highlights.

What did Powell say?

My Foolish colleague Bernd notes that while the 0.75% rate hike may have been expected and largely priced in, nobody could have anticipated that Powell would make such hawkish comments in a press conference after the Fed meeting took place.

He said inflation remains high and he has the expectation that interest rates will continue to rise to get it under control.

Powell said:

The level of rates that we estimated in September, the incoming data suggests that’s actually going to be higher. There is no sense that inflation is coming down… We’re exactly where we were a year ago.

The bigger picture, though, is that Powell also thinks the Fed’s chances of preventing a recession while getting inflation under control are becoming increasingly less likely.

When asked if he believes the chance of the Fed executing a ‘soft landing’ has been affected, Powell replied: “Has it narrowed? Yes. Is it still possible? Yes.”

Powell added:

The inflation picture has become more challenging over the course of this year, without a question. That narrows the path to a soft landing.

Piedmont Lithium share price snapshot

The Piedmont Lithium share price is now down 6% in the past two days after also falling 1.5% on Wednesday.

However, its shares are up 27% year to date. That’s a steep gain over the S&P/ASX 200 Index, which is down around 8% over the same period.

The company’s market capitalisation is around $1.55 billion.

The post Why did the Piedmont Lithium share price plunge on Thursday? appeared first on The Motley Fool Australia.

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More reading

• These were the best ASX lithium shares to buy in October
• 4 ASX lithium shares surging more than 10% today
• Guess which ASX lithium company is the biggest holder of Sayona Mining shares?
• Why Challenger, Novonix, Piedmont Lithium, and Woodside shares are racing higher
• 3 ASX lithium stocks leaping higher on big news

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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