Fed Pivot in 2026: 3 Rate-Sensitive Stocks Poised to Win Big

As 2025 draws to a close, Wall Street’s stance has shifted from a higher interest rate narrative to expectations of a more accommodative policy. A cooling labor market, moderating inflation and a gradual slowdown in economic momentum, exacerbated by disruption from the recent government shutdown, have strengthened the case for easing financial conditions.

In December, the Federal Reserve implemented its third consecutive quarter-point cut, lowering the benchmark policy rate to a 3.5%-3.75% range. While policymakers continue to emphasize patience and a data-driven approach, market participants are increasingly pricing in at least one more cut next year.

That said, the outlook for further easing remains uncertain. Inflation has cooled meaningfully from recent highs but continues to run above the Fed’s 2% goal. This balance — supporting growth while keeping inflation contained — suggests any policy moves in 2026 will likely be measured rather than aggressive.

Still, as policy uncertainty begins to fade, investors are returning to rate-sensitive sectors that were pressured during the monetary tightening cycle. Lower rates tend to reduce corporate borrowing costs, support consumer purchasing power and increase the present value of future cash flows — a combination that typically benefits sectors tied closely to credit conditions.

Against that backdrop, here are three rate-sensitive stocks — Crocs, Inc. CROX, Prologis, Inc. PLD and Green Brick Partners, Inc. GRBK — from industries historically positioned to outperform during easing cycles.

3 Prominent Picks

Consumer Discretionary: Crocs

Crocs is leveraging a powerful global brand portfolio and a flexible operating model that positions it well as consumer spending gradually improves in a lower-rate environment. Management is reinforcing long-term brand health by reducing promotional dependence and tightening wholesale supply, strengthening pricing integrity and maintaining the brand's position. Product innovation remains a clear catalyst, with refreshed clog franchises, expanding sandal offerings and new categories designed to broaden appeal. The company is also executing its strategy aggressively in digital and social commerce, utilizing disruptive marketing and international brand-building to deepen engagement and expand market penetration. With multiple growth levers across product, channel and international expansion, Crocs remains well-positioned for sustained success through the next cycle.

The Zacks Consensus Estimate for earnings has moved meaningfully higher for this Zacks Rank #1 (Strong Buy) company, rising 70 cents to $12.13 for the current fiscal year and increasing $1.19 to $12.60 for the next fiscal year over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

REIT and Equity Trust - Other: Prologis

Prologis is well-positioned to benefit, as lower rates could improve leasing activity, support occupancy recovery and reinforce rent growth across its best-in-class global logistics portfolio. The company’s competitive advantages — irreplaceable locations, high customer retention and a curated global footprint — continue to drive strong leasing demand. Prologis is also expanding its long-term opportunity set through a rapidly advancing data center platform and integrated energy solutions, creating additional secular growth engines beyond traditional industrial real estate. Management remains disciplined in capital deployment while leveraging its scale, balance sheet strength and customer connectivity to capture embedded value creation across cycles. With demand fundamentals improving and multiple durable growth pillars in place, Prologis remains exceptionally positioned for sustained long-term value creation. 

The Zacks Consensus Estimate for earnings for this Zacks Rank #2 (Buy) company has inched up over the past 60 days, rising by a penny to $5.80 for the current fiscal year and increasing 3 cents to $6.09 for the next fiscal year.

Building Products - Home Builders: Green Brick Partners

Green Brick Partners continues to set industry benchmarks with record-breaking net orders and industry-leading gross margins that have consistently exceeded 30% for 10 consecutive quarters. The company’s focus on high-volume Texas markets and the strategic expansion of its Trophy brand into Houston position it to capture demand from first-time and move-up buyers who are increasingly entering the market as affordability improves. By maintaining a disciplined approach to land acquisition and an investment-grade balance sheet, Green Brick is effectively navigating short-term market volatility while preparing for a major sales push in 2026. This operational excellence and robust land pipeline ensure the company is primed for sustained success and long-term shareholder value creation as financing conditions ease.

The Zacks Consensus Estimate for earnings for this Zacks Rank #2 company has trended higher over the past 60 days, rising by 51 cents to $6.91 for the current fiscal year and increasing 12 cents to $6.89 for the next fiscal year.

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This article originally published on Zacks Investment Research (zacks.com).

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