Lucid Group Stock Rebounds Ahead Of Fed Decision: What's Going On?

Lucid Group Inc (NASDAQ:LCID) shares are trading higher Wednesday afternoon, defying a bearish fundamental outlook as traders aggressively position themselves ahead of the Federal Reserve's interest rate decision. Here’s what investors need to know.

• Lucid Group shares are climbing with conviction. What’s fueling LCID momentum?

What To Know: The rally marks a sharp reversal from Tuesday's losses, which were precipitated by a Morgan Stanley downgrade warning of an extended “EV winter.”

While analyst Andrew Percoco cut his price target to $10 and projected EBIT losses persisting through 2031, technical factors appear to be driving Wednesday's price action. According to Benzinga Pro data released Wednesday, Lucid is among the market’s most heavily shorted stocks, with short interest reaching a staggering 52.70%.

This massive bearish crowding has likely created a coiled spring effect. Short sellers may be forced to cover positions to reduce risk before the Fed announcement, fueling a classic squeeze.

The broader market has priced in a 25-basis-point cut this afternoon, but the focus remains on the updated “dot plot.” Analysts at 22V Research are warning of a hawkish cut, suggesting the Fed may signal a pause in easing for 2026. For volatile, high-beta stocks like Lucid, Chair Jerome Powell's tone Wednesday afternoon will be crucial.

Watch: Fed Chair Jerome Powell FOMC Rate Decision | FOMC LIVE Press Conference

Benzinga Edge Rankings: Despite negative price trends across all timeframes, Benzinga Edge data shows Lucid retains a surprisingly strong Momentum score of 7.41.

LCID Price Action: Lucid Group shares were up 5.94% at $13.19 at the time of publication on Wednesday, according to Benzinga Pro data.

Currently, Lucid Group is trading approximately 23.7% below its 50-day moving average of $17.41, indicating a significant gap that suggests potential resistance at this level.

The stock is also trading about 38.8% below its 200-day moving average of $21.70, reinforcing the bearish trend that has persisted over the past several months.

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