The decision of the Fed (Federal Reserve) to cut interest rates, lowering them from 4.25% to 4% and opening the way to two other interventions by the end of the year, has rekindled optimism on global markets.
This is not an emergency cut linked to the recession risk, but a maneuver that the US central bank has accompanied to GDP -growing estimates for 2025 and 2026.
Because the Fed cut the rates
In other words, the American economy appears solid and this combination of lower rates and growth prospects represents a historically favorable condition for financial assets.
Analysts remember that, in the 12 months following a cut of the Fed, if a recession does not materialize, the equity markets tend to rise considerablely. It is therefore not surprising that Wall Street immediately updated its maximums and that the European squares also benefited from the most relaxed climate. There are several sectors that deserve a more careful look in the coming months.
Artificial technology and intelligence
The technological sector, historically very sensitive to the cost of money, was the first to benefit from the turning point. Lower rates mean less onerous funding and evaluations supported for Growth companies. Artificial intelligence, cloud and semiconductors remain key drivers: giants such as Nvidia, AMD, Microsoft, Meta and Oracle – among others – remain at the center of the interest of global investors. In Europe, companies such as ASML, SAP and Stmicroelectronics ride the same trend, offering a strategic alternative to the American players.
The attention point concerns the already high assessments of some big techs: a factor to be monitored because it can increase volatility.
Banks and financial sector
The cutting of the Fed rates reduces the margins of interest of traditional institutes, but large American business banks seem ready to benefit from a more business-friendly context. Goldman Sachs, JP Morgan and Morgan Stanley remain the protagonists in the Wealth Management and Trading segments. In Europe, the banking sector maintains historically content multiples and, in the cutting cycles of the Fed, it has often surrepted.
Real estate and Real Estate quoted
The lowest rates rekindle the interest in brick. In the United States, the Real Estate Investment Trust (Reit), in particular those related to logistics and data center (such as Prologis and Equinix), return to the spotlight. Listed real estate funds are also available in Europe which allow a diversified exposure to the sector. It is a sector that in recent years had suffered the weight of high mortgages and which could now benefit from greater liquidity.
Small and medium -sized enterprises
The cutting of the rates has given new lymph to the Russell 2000, the index of the American Small Cap, which touched historical tops. The SMEs are benefited from a cost of the more contained money, which favors investments and growth. Also in this case, tools such as ETFs allow you to access the sector in a diversified way.
Cyclical consumption and luxury goods
When rates go down, families find the most convenient to resort to credit, increasing the propensity for important expenses: from the retail sector to domestic renovations, up to the automotive sector. In Europe, an eye remains on luxury: brands such as Ferrari, Moncler and Brunello Cucinelli, after a period of consolidation, could benefit from a more favorable euro-dollaro gearbox and a growing extra-European demand. Always, it is clear, net of the unknown duties.
Pharma, Biotech and defensive
In uncertain scenarios or slowdown in work, the defensive sectors maintain attraction. Pharma and Biotech have already shown signs of strength, both in Europe (Sanofi, Roche, Diasorin) and in the United States. These sectors offer stability and growth potential linked to innovation, resulting in a useful counterweight to the most cyclical sectors.
Quality bonds and bonds
On the bond front, those who deducted fixed rate securities immediately benefits from the appreciation in wallet. For those who buy today, future returns are less generous: the classic strategy is to extend the deadlines to block still interesting returns before further drops. The American Treasury remain under observation, but also the Italian BTPs, which offer one of the highest yields in the euro area.
The most dynamic investors instead look at high yield or hybrid tools, also accessible through thematic ETFs.
