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7 Stocks I’m Targeting for a Tactical Rotation Ahead of Fed Rate Cuts
If you’ve been watching the Fed’s every move like a cat eyeing a laser pointer, you know we’re inching toward the start of a long-anticipated interest rate cut cycle. And when the central bank shifts from “hold” to “cut,” history shows the market doesn’t just react—it often parties. Since the mid-1970s, the S&P 500 has typically delivered double-digit gains from the first cut until the next hike cycle.
That’s why I’m making my own tactical rotation playbook—and these seven stocks top my list.
FND – Floor & Decor Holdings
Lower rates can mean more refinancing, bigger HELOCs, and suddenly everyone’s inner HGTV personality comes out. When borrowing is cheaper, home improvement spending tends to spike, and FND is right in the middle of that action. Their mix of affordable pricing and specialty selection positions them to capture a flood of DIY and contractor demand.
ASML – ASML Holding
ASML is basically the gatekeeper to advanced semiconductor production. Without their lithography machines, there’s no AI revolution, no 3-nanometer chips, no “next big thing” in tech hardware. Cheaper capital means chipmakers can unleash their capex budgets, and ASML is where those dollars get spent. If you believe in the long arc of AI growth, rate cuts could be the fuel for ASML’s next demand wave.
WING – Wingstop
Few things in life are certain: death, taxes, and people craving wings. Rate cuts don’t just lower corporate financing costs—they can also free up a little extra spending money for consumers. That could mean more people saying “yes” to a 20-piece combo on game night. As a high-growth restaurant chain with a cult following, Wingstop could ride that momentum straight into same-store sales boosts.
MA – Mastercard
In a lower-rate world, consumer confidence often improves, travel rebounds, and wallets open wider. Mastercard sits in the tollbooth position of the global payments ecosystem: every transaction is a tiny royalty. More swipes, more taps, more digital checkouts—it all flows into MA’s bottom line. Plus, they’re structurally insulated from much of the credit risk that traditional banks face.
TEAM – Atlassian
When money is cheaper, businesses spend more on collaboration tools, and Atlassian is a leader in this arena. Products like Jira and Confluence are sticky, mission-critical, and sold via a recurring revenue model that thrives in expansionary environments. If rate cuts encourage tech investment, TEAM is positioned to capture a share of those budget increases.
MSFT – Microsoft
Microsoft is the megacap cornerstone of almost any growth portfolio. It’s not just about Office anymore—it’s about Azure cloud dominance, AI leadership with tools like Copilot, and enterprise lock-in that competitors dream about. In a falling-rate environment, valuation multiples for high-quality, high-growth names often expand. MSFT’s fortress balance sheet and consistent earnings make it a perfect blend of growth and safety.
Oh yeah, and AI.
TYL – Tyler Technologies
Tyler is the quiet powerhouse of government software. Cities, counties, and states need tech upgrades, but many projects hinge on affordable financing through municipal bonds. Lower rates make those upgrades more feasible, and Tyler’s niche in public-sector ERP, court systems, and public safety software makes it the go-to provider when those budgets finally get green-lit.
The Big Picture
This list isn’t a random grab bag—it’s a sector-balanced lineup designed to benefit from multiple rate-cut ripple effects:
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Consumer Boost: FND, WING, MA
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Tech Expansion: ASML, TEAM, MSFT
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Public Investment: TYL
The Fed hasn’t pulled the trigger yet, but markets tend to front-run these moves. Positioning before the first cut often means catching the bulk of the upside.
These seven aren’t just “good companies.” They’re strategically placed to thrive in a lower-cost-of-capital world—whether that capital builds a new kitchen, funds a cloud migration, or finally upgrades a city’s court software from 1998.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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