Stocks to buy on cooling inflation and stocks to buy on potentially higher inflation will be front and center once the September PCE report hits. The PCE report is always a lagging indicator, and this print will be even more so. However, the report will heavily influence how aggressively the market leans into a Federal Reserve rate-cut narrative.
As of this writing, consensus estimates are clustered around 2.8%. A cooler number would reinforce "soft landing and gradual easing" as the base case. On the other hand, anything meaningfully hotter would revive concerns that inflation is not confined to areas such as shelter and food.
What should investors do? This PCE release is less about calling the exact number and more about having a playbook for both outcomes. If inflation comes in tame, the winners are likely to be rate-sensitive housing and high-quality consumer names that benefit from easier financial conditions and a healthier consumer.
If the data runs hot, history suggests that energy producers and select regional banks can offer better protection, as higher long-term yields and persistent inflation expectations reshape sector leadership.
Below are four stocks to buy: two are positioned for a cooling-inflation setup and two for an economy where inflation is likely to be higher for longer. ?
Stock to Buy on Cooling Inflation: Lennar
A Levered Play on Lower Rates and Housing Demand
Lennar (NYSE: LEN) is a direct way to express a "cooling inflation, easing Fed" thesis because lower PCE over time supports lower mortgage rates, better affordability, and a release of pent-up housing demand. Management's latest commentary emphasizes that the long-term need for housing remains intact and that the company is focused on affordability, even-flow production, and cost efficiency to capitalize on demand improvements.
Despite near-term pressure from high mortgage rates, recent analyses highlight early signs of stabilization as borrowing costs edge down and customers re-engage, with Lennar choosing discipline on volumes to protect margins rather than chasing every sale. Structural housing shortages and an eventual easing cycle form the core of the bull case, with some estimates calling out double-digit upside versus fair value if margins normalize with stronger demand.
In a world where a softer PCE accelerates talk of rate cuts, Lennar gives investors a liquid, large-cap way to lean into a housing upcycle without having to time the exact bottom in mortgage rates.
Stock to Buy on Cooling Inflation: Costco
Inflation-Weary Consumer, Membership-Driven Moat
Costco (NASDAQ: COST) is a high-quality way to play cooling inflation because it benefits from a healthier consumer and lower interest rate backdrop, while already proving it can grow through tougher macroeconomic conditions. In its fiscal 2025 Q4 report, Costco delivered 8% year-over-year net sales growth of roughly $84.4 billion and net income of about $2.61 billion.
The company also posted comparable sales growth of 5.7% globally and 5.1% in the U.S. This underscores resilient demand even as shoppers stayed cautious on discretionary spend.
The membership model is central to the story: fees climbed to approximately $1.72 billion with global renewal rates above 90%, providing a sticky, high-margin revenue stream that helps smooth out the macro cycle. Management's well-publicized refusal to raise prices on key traffic drivers like the $1.50 hot dog combo and $4.99 rotisserie chicken has reinforced customer loyalty and traffic, even with elevated inflation in recent years.
Costco's combination of value pricing, membership economics, and growing e-commerce (digital sales rising at a double-digit pace) positions it as a core holding for investors who want both defensiveness and upside in a softer-inflation, Fed-easing cycle.
Stocks to Buy on Potentially Higher Inflation: ExxonMobil
Cash-Flow Machine in an Inflationary World
If the PCE print runs hot and the market is forced to price "higher for longer," ExxonMobil (NYSE: XOM) is a logical beneficiary. Energy producers historically outperform when inflation is elevated, and commodity prices strengthen.
Sector research on energy ETFs shows that during bouts of macro stress and inflation worries in 2025, energy equities often rose on days when the broader market sold off. This highlights their role as a portfolio hedge when real yields and inflation expectations move higher.
ExxonMobil's edge is its portfolio of advantaged, low-cost assets, particularly in Guyana and the Permian Basin, which allow it to generate attractive returns even at relatively low oil prices. The company has indicated that more than half of its production comes from these high-return assets and has outlined a plan to push corporate breakevens toward about $30 per barrel by 2030. That reinforces its ability to produce durable free cash flow through the cycle.
Recent earnings updates also show that, despite some year-over-year volatility in segment profits, ExxonMobil continues to post multi-billion-dollar quarterly earnings and return significant capital to shareholders via dividends and buybacks.
Stocks to Buy on Potentially Higher Inflation: Huntington Bancshares
Regional Bank with Rate and Growth Leverage
Huntington Bancshares (NASDAQ: HBAN) gives investors a more nuanced way to play a hotter-inflation or "higher-for-longer" rates narrative. Regional banks can benefit from firm long-term yields and healthy loan growth.
In 2025, Huntington has reported robust loan and deposit trends: second-quarter results showed average loans up about 8% year over year and deposits up roughly 6%, while maintaining a common equity tier 1 (CET1) capital ratio around 10.5% and improving tangible book value per share in the mid-teens percentage range.
That growth is being reflected in earnings power. Management recently upgraded its 2025 net interest income guidance to an 8%–9% increase, alongside a raised loan growth outlook of 6%–8%, reflecting confidence that the bank can expand its balance sheet and margins even in a challenging rate environment.
Third-quarter commentary highlighted an 11% jump in net interest income and rising fee revenue, while credit quality metrics remain solid, with low net charge-offs and strong reserve coverage.
If a hot PCE reading extends the "higher-for-longer" backdrop and supports a steeper curve over time, Huntington's combination of above-peer loan growth, expanding franchise in fast-growing regions like Texas and the Carolinas, and solid capital position makes it an attractive choice for investors comfortable with cyclical financial exposure.
Stocks to Buy Around the PCE Print
Whether the September PCE data confirm cooling inflation or flash a hotter-than-expected signal, having defined "cool" and "hot" playbooks: Lennar and Costco on one side, ExxonMobil and Huntington on the other, gives investors a more disciplined way to trade the macro narrative rather than guessing the headline number.
0 Response to "Institutions Are Circling This Mining Discovery 🔍📈"
Post a Comment