Meteorologists at the National Oceanic and Atmospheric Administration (NOAA) have issued a bleak forecast for 2024's hurricane season, which runs June 1 to Nov. 30. The most devastating hurricanes cause hundreds of billions of dollars in damages and can greatly impact the financial markets.

NOAA Announcement: NOAA administrator Rick Spinrad outlined the NOAA's forecasts at a news conference on Thursday.

In the Atlantic region, forecasters predict an 85% chance of an above-normal hurricane season, a 10% chance of a near-normal season and a 5% chance of a below-normal season. The NOAA predicts there will be eight to 13 hurricanes with four to seven of those being classified as severe.

This year's heightened forecast is attributed to warm ocean temperatures, La Nina in the Pacific, Atlantic trade winds and less wind shear.

Why it Matters: Extreme weather can cause changes in commodity prices and affect consumer demand.

Home improvement stores such as Home Depot Inc (NYSE:HD) and Lowe's Companies Inc (NYSE:LOW) tend to see increases in sales after extreme weather events.

Generac Holdings Inc (NYSE:GNRC) produces household generators, which may increase in popularity before and after hurricanes as consumers brace for power outages.

Recent increases in extreme weather are widely attributed to climate change. The transition to clean energy has been led by companies such as First Solar Inc (NASDAQ:FSLR) and Enphase Energy Inc (NASDAQ:ENPH). Popular ETF options are the iShares Global Clean Energy ETF (NASDAQ:ICLN) and the Invesco Solar ETF (NYSE:TAN).

Major insurers such as Allstate Corp (NYSE:ALL) and Berkshire Hathaway Inc. (NYSE:BRK) have ended coverage in certain regions due to climate risks.