The Vulcan Energy Resources Ltd (ASX: VUL) share price has started the week strongly.
In afternoon trade, the lithium developer’s shares are up 6% to $7.97.
Why is the Vulcan share price storming higher?
The Vulcan share price is charging higher today after investor sentiment in risk assets improved greatly.
This has been driven by the release of economic data in the United States, which shows that inflation slowed in April from a multi-decade high in March.
This has sparked hopes that the US won’t fall into a recession and that the US Federal Reserve won’t need to be as aggressive with its rate hikes.
The latter bodes well for higher risk assets like lithium shares, which have seen their valuations come under significant pressure in recent months.
It isn’t just the Vulcan share price that is rising today. A number of other lithium shares are rising today.
As well as getting a boost from improvements in risk sentiment, optimism that lithium prices will remain higher for longer has given the sector a lift in recent sessions.
A key driver of this was the recent BMX auction update from Pilbara Minerals Ltd (ASX: PLS), which revealed another record lithium price received. Furthermore, it was well ahead of what analysts Macquarie Group Ltd (ASX: MQG) were expecting.
This appears to indicate that the lithium market has remained strong despite rising inflation and concerns over global economic growth.