The US senate just passed a massive $430 billion bill to fight climate change, reduce drug costs — and these stocks are buzzing because of it
The clean energy sector has had a choppy ride over the past year. But it’s been all bullish news in recent days.
On Sunday, the Senate passed the Inflation Reduction Act. Considering that the $433 billion spending package – called the Inflation Reduction Act – consists of around $370 billion on climate and energy programs, it’s no surprise that clean energy stocks are buzzing Monday.
Electric vehicle giants Tesla (TSLA), Rivian (RIVN), and Lucid Group (LCID) are all up about 5% in early trading. Meanwhile, ETFs that focus on the sector including the Invesco Solar ETF (TAN), SPDR Kensho Clean Power ETF (CNRG), and the iShares S&P Global Clean Energy Index ETF (ICLN) are all rallying nicely.
The bill also allows the Medicare programme for older and disabled Americans to negotiate drug prices with big pharma companies for the first time. Pharmaceutical giants Pfizer (PFE), Sanofi (SNY), and Eli Lilly (LLY) are all down slightly.
Senators voted along party lines: all 50 Senate Democrats voted for the legislation while all 50 Republicans voted against it. Vice President Kamala Harris provided the tie-breaking vote.
This marks a significant step forward for President Joe Biden’s environmental agenda.
Next, the bill will head to the house.
“The House will return and move swiftly to send this bill to the President’s desk — proudly building a healthier, cleaner, fairer future for all Americans,” said House Speaker Nancy Pelosi.
Not smooth sailing, but could be a winning investment theme
Renewable energy stocks have garnered a lot of attention lately, but performance has been unstable.
In a 50-50 Senate with a united Republican opposition, the bill needed every Democratic Senator’s support to move forward.
So when reports came out on July 15 that Senator Joe Manchin would not be supporting his party’s economic package that includes new spending on climate measures, clean energy stocks – and…