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5 Stock Winners (and Losers) When the Fed Raises Rates

Interest rate raises are on the way from the Federal Reserve and when that happens the stock market will react.

A question mark among various percentages representing when the fed raises rates.

Source: travellight / Shutterstock.com

The Fed revealed plans for interest rate increases during its most recent meeting. For today, it’s expected to increase interest rates by .25%. The rest of the year could see as many as eight more interest rate increases as the government tries to stop inflation without kicking off a recession.

With interest rates increasing, some stocks are going to perform well than others. Let’s take a look at how some sectors will be affected by interest rate increases below!

When the Fed Raises Rates Winners

  • Financial stocks, such as Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), and Bank of America (NYSE:BAC), typically perform better with rising interest rates.
  • Commodity stocks also often do well with higher interest rates as investors seek them out. A few examples include Alcoa (NYSE:AA), Freeport-McMoRan (NYSE:FCX), and Rio Tinto (NYSE:RIO).
  • Industrial stocks are another type that performs well when interest rates are on the rise. Among these are Caterpillar (NYSE:CAT), Applied Industrial Technologies (NYSE:AIT), and MasTec (NYSE:MTZ).

When the Fed Raises Rates Losers

  • Growth stocks usually don’t do well and that includes many in the tech sector, such as Meta Platforms (NASDAQ:FB), Shopify (NYSE:SHOP), and Netflix (NASDAQ:NFLX).
  • Precious metal stocks are another that can see a negative effect from increasing interest rates. That includes gold mining companies, such as Barrick Gold (NYSE:GOLD), Newmont (NYSE:NEM), and GoldMining (NYSEAMERICAN:GLDG).

Of course, there’s more to discuss today than just rising interest rates!

We’ve got all the most recent stock news for Wednesday that traders need to know about. A few examples include what’s happening with shares of Starbucks (NASDAQ:SBUX) stock, why Chinese stocks are soaring, as well as a look at the oil market. You can find all of this info at the following links!

More Stock Market News for Wednesday

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/03/5-stock-winners-and-losers-when-the-fed-raises-rates/.

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