3 Stocks Set to Skyrocket if the Fed Cuts Interest Rates

In partnership with

Could September be the month that breathes new life into your portfolio? With the Federal Reserve possibly cutting interest rates, certain stocks are poised to take off—and you don't want to miss out. Let's dive into three companies that could benefit big time from this anticipated move.

Why an Interest Rate Cut Could Change the Game

After more than a year of interest rates hovering above 5%, the Federal Reserve might finally ease up in September. This potential move isn't just a random guess; it's backed by a slew of economic signals. Job growth has slowed, unemployment has crept up, and bond yields have hit new lows, all pointing toward a likely rate cut. Federal Reserve Chairman Jerome Powell even hinted that this could be on the table, which has investors buzzing.

So, what does this mean for you? In a nutshell, lower interest rates make borrowing cheaper, which can boost spending and, in turn, lift certain stocks. Here are three companies ready to reap the rewards:

1. Ford (F): Revving Up for an EV Surge

Ford (NASDAQ: F) has had a tough year, with its stock down 19%. But here’s the silver lining: This dip presents a prime buying opportunity, especially with a potential rate cut on the horizon. Ford is a household name, known for its iconic lineup, including the Ford F-150 Lightning and Ford Pro. Yet, recent earnings have been a bit of a downer—earnings per share (EPS) fell to $0.47, missing the expected $0.68.

Looking for a smarter way to invest? Betterment makes it easy to grow your wealth with automated, personalized investing. Whether you're new to investing or a seasoned pro, Betterment’s tools help you achieve your financial goals faster. Ready to take your portfolio to the next level? Click on the image below to get started today!

We put your money to work

Betterment’s financial experts and automated investing technology are working behind the scenes to make your money hustle while you do whatever you want.

Learn more

Despite these setbacks, Ford’s electric vehicle (EV) segment is where the real excitement lies. Yes, it’s currently a loss-making venture, but an interest rate cut could be the catalyst Ford needs. Lower borrowing costs mean more consumer spending, which could ignite demand for EVs. Imagine the potential growth as Ford shifts gears and accelerates into a greener, more profitable future.

2. Verizon (VZ): Dialing Down Debt and Dialing Up Value

Verizon (NYSE: VZ) has been feeling the pressure of rising costs, and its stock has taken a hit. But don’t write it off just yet. With a juicy dividend yield of 6.56% and a bargain valuation at just 8.9 times its projected 2024 earnings, Verizon is one of the top stocks to watch if the Fed cuts rates.

In the last quarter, Verizon’s revenue slipped to $32.8 billion, below the expected $33.06 billion, largely due to higher phone plan prices and fewer people upgrading their phones. Plus, rising interest payments on its $1.7 billion debt have squeezed profits. However, a rate cut could ease this burden, reducing debt costs and potentially spurring demand for its phone plans. Imagine Verizon slashing its debt payments and reinvesting those savings into its expansive wireless network—sounds like a win-win, right?

3. PayPal (PYPL): Cashing In on Increased Transactions

PayPal (NASDAQ: PYPL) has had its share of ups and downs, but the future looks bright. In Q2, the fintech giant reported an 8% revenue increase year-over-year, hitting $7.9 billion—just above estimates. Payment volumes surged 11%, and transactions climbed 8% to a staggering $6.6 billion.

Here’s where it gets interesting: A rate cut could be the wind beneath PayPal’s wings. Lower interest rates often lead to increased consumer spending, which would drive higher payment volumes for PayPal. Plus, it might just kickstart a rebound in active account growth, which dipped by 0.4% last quarter. With new features rolling out across its platform, PayPal is set to lock in users, expand its market share, and deliver long-term gains. If you’re looking for a stock that could benefit from September’s potential rate cut, PayPal is a strong contender.

Wrapping It All Up: How Will You Position Yourself?

The potential Fed rate cut in September is more than just speculation—it's a strategic opportunity waiting to be seized. Ford, Verizon, and PayPal stand out as top contenders ready to thrive in a lower interest rate environment. Whether you're planning to buy the dip or fortify your existing portfolio, these stocks offer promising avenues for growth that could deliver substantial returns in the long term.

But here's the real question: How will you position yourself? Will you take advantage of these potential market movers, or will you sit on the sidelines? The decision you make today could shape your financial future tomorrow.

As you ponder your next move, don't just let this information sit idle—put it into action. If you found this analysis valuable, why not dive deeper? Subscribe to our newsletter for more expert insights and strategies tailored to help you navigate the ever-changing market. And don’t forget to share this post with your network—because investing is always better when you do it together.

For more detailed insights, check out the sources below:

• Reuters on the Fed's potential rate cut

• CNBC on Ford's latest earnings

• Moomoo on Verizon's financials

• MarketWatch on PayPal's performance

Code. Grow. Prosper.