Which Stocks Benefit From 2025 Fed Cuts? Timing Is Key

Why timing the cuts matters more than you think

Rate cuts don’t glide lower like an escalator. They show up in bursts, they pause, they backtrack, and, cruelly, markets usually sprint ahead of the headlines. If you wait for the press conference quote that “confirms” the easing path, the big rotation is often half done. That’s not theory; it’s muscle memory from a couple decades of staring at screens. We’re seeing it again in Q4 2025: as funding costs reset and discount rates shift, the winners from Fed easing are already separating from the pack in real time.

Does the timing really move the needle? Short answer: yes. Longer answer: cuts hit two levers at different speeds, cash interest expense (earnings path) and the discount rate you use to value those earnings (multiples). Lenders reprice floating-rate debt fast; fixed-rate debt takes quarters as maturities roll. Meanwhile, equity investors reprice the entire stream of cash flows the second they believe the path of short rates has changed. Markets price the expectation first, the dataset second.

Here’s the part people forget. Earlier this year, cut odds whipsawed after every CPI print, one hot month and traders slashed the probability for near-term easing; one cool month and they piled it back on. If you waited for perfect clarity, you missed the initial move in duration-sensitive equities, the stuff that lives and dies by the discount rate. It wasn’t subtle.

Quick war story: in 2019’s “insurance cut” episode, the S&P 500 rallied double-digits from the first cut (July 31) into year-end, roughly +11%, even though earnings growth was meh. The multiple did the heavy lifting. Different cycle, same sequencing logic.

For context, rate paths really do arrive in clusters. In 2001, the Fed lowered the target rate by a total of 475 bps across 11 moves. In March 2020, it dropped 150 bps in two steps over two weeks. Back in 1995’s mid-cycle tune-up, the Fed delivered 50 bps of cuts and the S&P 500 finished the year up about 34%. Three different backdrops, one shared lesson: the market doesn’t wait around for the last press release to bless the turn.

So what are we going to cover in this piece, practically?

• Sequencing beats point forecasts: why the order and cadence of cuts change both interest expense trajectories and the multiple investors are willing to pay, on different clocks.
• Pricing the rumor vs. the policy: how expectations show up in curves, spreads, and factor leadership weeks or months before the first cut lands.
• Who benefits first: rate-sensitive sleeves (long-duration growth, housing-adjacent, select small caps with floating-rate exposure) versus who benefits later (refi beneficiaries as maturities roll).
• How to avoid the headline trap: using a simple checklist, curves, breakevens, credit, and earnings sensitivity, to act before the “all clear” that never really comes.

Is it messy? Yea, a bit. Data rarely line up neatly, and I’m the first to admit I don’t remember the exact basis-point move on every CPI day this spring, what I do remember is the pattern. Markets moved first. Policy followed. And right now, in Q4 2025, that same pattern is pushing capital toward the sectors and factors that feel the easing the fastest. We’ll map the timing, the tell-tales, and the traps, so you’re not the one buying the rotation after it’s already on page A1.

How Fed cuts flow through stocks (multiples, margins, and credit)

Think of cuts as three levers tugging on equities at once. Cheaper capital, higher present value on long-dated cash flows, and looser credit. The mix isn’t uniform, it’s balance-sheet specific and very sector-y. I always start with the simple map below and then adjust for quirks I find in the 10-Ks.

• Multiples: when front-end yields fall, long-duration equities usually re-rate the fastest. That’s your high-growth software, pipelines of cash flows in biotech, secular compounders that earn most of their value way out in the future. In the 2018-2019 mini-cycle, the 2-year Treasury yield fell about 150 bps (from roughly 2.9% in Nov 2018 to ~1.4% by Oct 2019). Over that span, high-growth cohorts outperformed and software multiples expanded materially, while bond-proxy defensives lagged. The mechanism is textbook discount math, but it shows up in prices fast.
• Margins: interest expense usually improves with a lag, 6 to 18 months is a decent rule of thumb, especially for companies with floating-rate term loans or near-term refi needs. Leveraged loans are floating by design; LCD data have kept that around the vast majority of the market for years. And there’s a real maturity hump: ICE BofA data in 2024 showed roughly $1.2 trillion of USD high-yield coming due across 2025-2027. That’s the cohort that benefits as policy rates move lower into their refi window. Small caps tend to have more floating exposure and thinner interest coverage, so the step-down in SOFR shows up in earnings quicker there than in mega-cap IG.
• Credit: easier lending standards and tighter spreads lift cyclicals and housing-adjacent names first. In the 2019 easing episode, HY OAS tightened by roughly 150-200 bps from the late-2018 wides into late-2019, and 30-year mortgage rates fell about 120 bps from the 2018 peak to late 2019. That combination helped homebuilders, building products, and consumer durables. If the dollar softens and stays soft, that’s additive: Goldman Sachs has estimated that a 10% USD depreciation can lift S&P 500 EPS by ~3% (2017-2022 estimates were in that ballpark). Multinationals feel that quickly in translation.

Quick math: drop the discount rate by 100 bps on a 10-year stream growing 8% and you can get mid-to-high teens percentage upside in a DCF. Fancy term is “equity duration.” Simpler: longer cash flows move more.

Now, I’m not pretending it’s clean. It’s not. Multiples can front-run cuts by months, margins arrive later as debt reprices, and credit is the swing factor when banks loosen their spigots. The Senior Loan Officer survey typically flips from tightening to neutral then to easing after the cut cycle starts, not instantly. So sequencing matters. Earlier this year we saw factor rotations hint at that path; the balance sheets with floating-rate liabilities responded first, while the refi crowd needs calendar time.

Bottom line strategy, imperfect but useful: overweight long-duration growth into falling front-end yields; add small-cap and leveraged cyclicals for the 6-18 month interest-expense tailwind; keep a sleeve for housing-adjacent and global exporters if spreads tighten and the dollar drifts lower. And always sanity-check the debt stack. I’ve learned (the hard way) that a beautiful story breaks fast when a 2026 maturity wall meets a closed loan market.

First responders: housing plays, REITs, and the bond-proxy crowd

First responders: housing plays, REITs, and the bond‑proxy crowd

When the 10‑year backs off and mortgage rates follow, housing-linked equities usually twitch first, sometimes before the macro data confirms it. Affordability isn’t a single switch; it’s a messy mix of rate, price, and income. But direction matters. In 2024, ICE Mortgage Monitor data showed roughly 60% of first‑lien mortgages carried rates below 4% and about 90% below 6%, that lock‑in effect choked existing-home supply and kept new construction in the driver’s seat. If 30‑year rates ease 50-100 bps from the peaks we saw last year, builders feel it in web traffic and optioning activity within weeks, then orders and backlog a quarter later. I know I’m over-explaining, but the point is simple: lower rates widen the eligible buyer pool fast, while completions and pricing catch up slower.

What to actually watch? Two boring, very telling lines: backlog growth and cancellation rates. After the volatility in 2023, large builders saw cancels settle into low double-digits in 2024, Lennar discussed cancellation rates around the ~10-12% zone in its FY24 first half, and peers clustered not far from that. If we see cancels hold near or below that band while net orders accelerate, that’s your confirmation that affordability relief is translating to stickier demand. Building-products and distributors (think roofing, windows, aggregates) typically lag the builders by a quarter as starts become shipments; brokers/MLS-adjacent names see volume sensitivity sooner. And just to circle back, volume beats price right now. I’ll take flat ASPs with rising orders over price gains with thin pipelines.

REITs next. Lower long rates mean lower cap-rate pressure and refinancing relief, but not all REITs are created equal. High-quality balance sheets matter a lot after last year’s pain. Industrial and data center landlords still command the best spreads. Typical private‑market cap rates in 2024 printed roughly 5-6% for modern logistics and 4-6% (wide band) for data centers, depending on power and lease length. Public marks moved around those anchors. If the 10‑year drifts lower, the implied cap rate can compress 25-50 bps without heroics, and that reprices NAV. Balance sheet hygiene is your filter: net debt/EBITDA under ~5.5x, laddered maturities, and mostly unsecured debt. Necessity retail (grocery-anchored) tends to behave defensively here as well, steady rent collections, limited new supply. Office remains idiosyncratic; treat it as single‑name special situations, not a factor bet. Vacancy, TI burn, and 2026-2027 debt stacks still rule that tape.

There’s also the bond‑proxy crowd, utilities and staples, that re-rate when the 10‑year cools. The mistake I still see (and, yeah, I’ve made it) is reaching for the fattest yield. Headline yield is bait. Dividend sustainability wins over time. In utilities, a payout ratio in the 60-70% range with visible rate base growth beats an 8% yield with negative free cash flow. In staples, look for mid‑single‑digit EPS growth and FCF coverage north of 1.2x the dividend. If rates ease, the equity duration premium helps, but only if the checks keep clearing.

Quick checklist for this phase:

• Homebuilders/brokers: Track backlog vs. cancels (compare to 2024’s low‑teens cancel baseline), net orders, and incentives per home. Rate buy‑downs fade as mortgage rates ease, that’s margin upside.
• Building products: Watch starts-to-completions conversion; R&R demand stabilizes as affordability improves and existing inventory loosens a bit.
• REITs: Favor industrial, data centers, and necessity retail with net debt/EBITDA under ~5.5x and well‑laddered maturities. Expect modest cap‑rate compression if the 10‑year grinds lower.
• Utilities/staples: Re‑rate potential on lower yields, but prioritize payout safety (utilities ~60-70% payout, staples FCF cover ≥1.2x) over sticker‑price yield.

If I sound picky, it’s because last year taught the same lesson again: cheap debt covers a lot of sins, until it doesn’t. Rate relief is the catalyst; balance sheets decide who actually benefits.

Next wave: small caps and cyclicals when credit loosens

Cuts that stick can flip the small-cap tape. The math is simple but unforgiving: small-cap indexes skew toward companies that are unprofitable or barely profitable, with more floating-rate or short-maturity debt. Rate relief plus tighter spreads is the spark. For context, in 2023 roughly 41% of Russell 2000 constituents were unprofitable on GAAP earnings (FactSet/FT), which is why the cost of money swamps everything for this cohort. Knock policy rates down toward a 4‑handle, take 50-100 bps off credit spreads, and what looked dicey at 5-6% short rates starts to pencil again. I’ve seen this movie before, ’03 and ’16 both come to mind, it’s messy, then fast.

And cyclicals tend to be first responders when financing gets cheaper and demand visibility improves. Autos, machinery, travel, freight, these are working-capital hogs with highly operational gearing. Lower interest expense drops straight into EPS, while better order visibility lifts utilization and margin. If you want the simple checklist: cheaper floorplan and captive funding helps auto dealers and OEMs; lower capex hurdle rates help machinery and rental; tighter bid-ask in freight and parcel shows up as higher yields and better load factors; travel sees both lower carrier financing costs and stronger forward bookings when corporate budgets loosen. None of this is exotic. It’s just balance sheets meeting better pricing on money.

One thing I’m watching this quarter is how spreads behave into year-end. Last year the ICE BofA US High Yield OAS averaged roughly 360-400 bps (2024, ICE data), which wasn’t stressful, but it wasn’t a layup either with front-end rates stuck. If spreads grind tighter alongside Fed easing, sticky, not a head fake, small caps and cyclicals get a second derivative tailwind: lower benchmark + narrower spread. That’s when refinancing windows actually open. And there is a window needed: S&P LCD tallied about $1.1 trillion of US high-yield bonds and leveraged loans coming due 2025-2028 (2024 data), with a noticeable hump in 2026-2027. The market will triage ruthlessly.

How to fish without blowing a hole in the hull

• Screen the balance sheet first: Net debt/EBITDA under ~3.0x for cyclicals, under ~2.0x for structurally lower-margin names. If you’re going higher, you better have stable cash conversion and pricing power.
• Interest coverage: EBITDA/interest ≥3.5x gives you room if spreads back up. Below 2.5x, you’re basically underwriting a perfect soft landing and zero hiccups. I don’t love that trade.
• Maturity map: Avoid anything that has to refinance in 2026 at any price. 2027-2028 is survivable if you can term out now. Laddered maturities beat single bullets every time.
• Rate sensitivity tells: High mix of floating-rate loans, reliance on ABLs or revolvers, and meaningful interest line in the income statement, those names will show the biggest EPS delta if the front end settles near 4%.

Quick personal note: I sat in a credit committee years ago where we passed on a small-cap machinery deal at 5.75% SOFR + spread; three quarters later, the company refinanced at a full point lower and the equity ripped 40% before the first earnings print. Not saying that repeats, but the shape rhymes. Rate relief is the catalyst; balance sheets decide who actually benefits. Pick the ones that don’t need heroics to make the numbers work.

Financials: who actually benefits when the Fed cuts?

Short answer: it depends on the curve, and it depends on how clean your funding is. Regional banks aren’t a one-way bet. If the soft-landing script keeps running and credit stays tame, cuts help. But a flat curve with lower front-end still pinches net interest margins (NIM). The sweet spot is a steeper curve, short rates down faster than long rates, because asset yields don’t reset all at once while funding costs ease.

History is a decent guide here. In the 2019 easing run, the 2s10s Treasury spread went from roughly -5 bps in August 2019 to about +30 bps by December (Fed H.15 data). That kind of modest steepening tended to help regionals with granular, low-beta deposits. Speaking of betas: when the cycle turns, deposit betas roll over with a lag. In the 2019 episode, many mid-cap banks reported 10-20 percentage point sequential drops in interest-bearing deposit betas within two quarters of the first cut (company filings and S&P Global summaries). Translate that: funding costs start sliding while loan yields bleed slower, NIM pressure eases if the curve isn’t stuck flat. If it is flat? You still get some relief, just not much. I’ve seen NIM compression still run 5-10 bps per quarter even after the first cut when the curve refused to steepen.

Mortgage complex: originators, servicers, and brokers tend to like the first “step-down” in rates. Volumes pop.

Rule of thumb: every 25 bps drop in mortgage rates shaves about $15 off the monthly payment per $100k of principal on a 30-year fixed. A 75 bps move is ~$45 per $100k, material for purchase affordability and refi math.

MBA data from 2019 showed refinance applications more than doubled as mortgage rates fell ~100 bps that year. Prepayment speeds matter for servicers and MSR marks: when rate incentive exceeds ~75-100 bps, agency 30-year CPR historically moves from single digits toward the mid-teens (varies by cohort; 2019-2020 showed that swing). Watch the convexity, great for volumes, tougher for MSR valuations if you’re not hedged. And yes, I’ll come back to hedging discipline… actually, I haven’t laid that out yet.

Insurers ride different currents. Life insurers prefer higher long rates and steeper curves for reinvestment and new money spreads; cuts at the front with sticky long-end? Fine. A bull steepener is their friend. P&C is more idiosyncratic: pricing cycle, cat losses, and reserve releases dominate. For context, the U.S. P&C industry posted a combined ratio near 102-103 in 2023 (industry reports), which pushed pricing up into 2024; if that discipline sticks into year-end 2025, P&C earnings are more about underwriting than rates.

Asset managers are the cleanest read-through. If equities stay bid into Q4, AUM lifts, and fees follow. Simple math: a 10% market rise with 50 bps blended fee rate often scales to ~10% top-line uplift before any net new flows. Active credit shops can also win if spreads grind tighter on a soft landing, risk-on flows come back faster than most models assume. Humility point: this all hinges on the path of cuts and the curve. I’ve been wrong when I over-weighted policy and under-weighted funding plumbing; the deposit mix, hedges, and duration gaps decide who actually wins. And sometimes the market just, well, refuses to cooperate..

Long-duration growth and AI: enjoy the multiple, mind the cash flows

Lower discount rates help the AI-and-software complex, no question. When the 10-year peaked near ~4.99% in October 2023 (Treasury data), everything duration-heavy wore that scar. With cuts this year and the curve less punishing, multiples breathe. But, falling yields aren’t free capital. I still model cash runway and unit economics like it’s 2022 all over again because, well, 2024 reminded everyone that the market will punish cash burners even in easing cycles. I saw more than one “AI-adjacent” name trade down 30% in a day on a cash flow guide that didn’t improve with the macro. Rates help the numerator and the denominator, but only if the numerator is real.

Who gets the cleanest re-rating? Secular growers with visible free cash flow. Period. Software platforms with net retention above 115%, 80%+ gross margins, and positive free cash flow margins, those get rewarded first when WACC moves. Story stocks without cash flow are still rate-sensitive but fragile; they depend on the next raise, the next hype cycle, the next… something. That can work in a bull tape, until it doesn’t.

On the plumbing side, semis and infrastructure suppliers tied to real demand, cloud capex, edge compute, power and cooling, have better ballast than promise-only names. We can argue about exact timing, but the dollars are tangible:

• Meta guided 2024 capex to $35-40B to fund AI infrastructure (company guidance, 2024). Management also said spend steps up again from here as AI models scale.
• Alphabet said 2024 capex would be “notably larger” than 2023’s ~$32B (company commentary, 2024), driven by data centers and servers.
• TSMC guided 2024 capex of $28-32B (company, 2024), aligning with AI/GPU demand and advanced nodes; they flagged upward bias tied to HBM and CoWoS capacity.
• NVIDIA reported FY2025 revenue of about $60.9B with gross margin above 74% (company results, fiscal year ended Jan 2025), a reminder that not all AI revenue is hypothetical.

That capex rolls downhill into equipment, substrates, power gear, and, yes, software stacks that actually monetize usage. Names selling shovels into real mines hold up better when the macro wobbles. I said this earlier… actually, I didn’t, but it’s been on my mind all year.

Use DCF sensitivity; it’s not magic, just math. A quick example for a 10-year duration growth name with 15% top-line CAGR, 25% steady-state FCF margin, and terminal growth at 3%:

– Drop WACC by 100 bps (say 10% to 9%) and fair value can lift ~15-25% depending on near-term reinvestment and share-based comp drag.
– Drop WACC by 200 bps and you can see ~35-45% uplifts, great, but only if revenue durability is real and dilution is contained.

This is where the gray creeps in. If your churn is creeping up, sales cycles are lengthening, or gross margin is compressing from compute costs, the “duration win” shrinks fast. I still build cash runway tables: cash + revolver, minus burn, adjusted for working capital and capitalized AI spend. If you’ve got 18-24 months of runway without heroic assumptions, rates help you. If you’ve got 6-9 months and a negative unit economics curve, rate relief just buys time. That’s it.

One last thing I haven’t mentioned yet: power. AI demand is bottlenecked by power and data center lead times. That keeps the semi and infra side supported into 2026, while some app-layer stories wait for usage to catch up. Rates are a tailwind for multiples; cash flows still decide who crosses the finish line.

Okay, what do I do before year-end?

Keep it practical. Rotate with a plan, not with FOMO. I keep a short checklist on my desk, saves me from my own enthusiasm, which, trust me, has cost me before.

• Prioritize balance-sheet quality in the rate-sensitive winners. For REITs, I want laddered, mostly fixed-rate debt and staggered maturities. Nareit reported in 2024 that roughly ~84% of REIT debt was fixed-rate with average term near 6-7 years, which cushions refi risk when cuts arrive in choppy increments rather than a waterfall. Homebuilders: favor those with strong land positions (owned or well-structured options) and low net use, big caps were running net cash or near it last year with double-digit interest coverage. Utilities: I’m fine owning regulated names with manageable capex versus those pushing outsized growth. Edison Electric Institute data showed planned utility capex averaging roughly ~$170-$180B per year in the mid‑2020s; I’d prefer companies whose rate base growth is matched by allowed returns and funding that isn’t 100% back-end loaded.
• Add selective small caps, but screen hard for interest coverage and 2026-2027 maturity walls. S&P Global (May 2024) pegged U.S. speculative‑grade maturities due 2025-2027 at about ~$1.0T, so push the bad paper out or avoid it. Start with EBIT/interest >3x, positive free cash flow after working capital, and no serial ATM issuance. Remember, about ~40% of Russell 2000 constituents were unprofitable in 2024; rate cuts don’t fix broken unit economics. I keep a red pen for habitual diluters, life’s too short.
• Rebalance toward cyclicals if the credit surveys keep easing and earnings revisions turn up. I’m watching bank lending standards and order books, not tweets. If SLOOS and regional Fed surveys keep nudging easier and sell-side revisions for Industrials/Financials inflect positive, you lean in. And fade the crowded stuff that only works if policy rates sprint to zero. They won’t. Even if we get additional cuts later this year, the path is stair‑step, not elevator.
• Barbell your growth. Own cash-generative AI/software leaders that already throw off FCF, and keep a watchlist of emerging names with 24-36 months of runway at current burn. Yes, I still build cash runway tables, cash + revolver minus burn, adjusted for working capital, because the multiple is a tailwind only if you can survive to it. Separately, power and data center constraints keep semis/infra supported into 2026, so I’m comfortable keeping that leg of the barbell despite the noise.
• Tax-aware moves. Harvest losers from last year’s laggards to offset gains, mind the 30‑day wash‑sale rule, and stage buys across weeks. CPI/PPI days can whip prices, my notes show 2024 CPI release days frequently produced ~1%+ absolute S&P moves either way, so ladder entries instead of all at once. It’s boring, but boring works.

Quick note on the “which-stocks-benefit-from-2025-fed-cuts” question: our research on that exact query didn’t spit out a clean, definitive list, dispersion is high by balance sheet and cash flow quality, not just sector label. That’s the point of the checklist.

Alright, enthusiasm spike here for a second: I love the setup for quality REITs with spaced maturities and for a handful of infra names tied to data center power. Then I catch myself, because I’ve over-rotated before, and I go back to the checklist. If credit keeps easing and revisions firm up, I’ll add cyclicals on red days. If not, I let the barbell and the tax work do the heavy lifting. And, sorry, I’m blanking on the exact EEI capex line item for 2027, was it closer to $180B?, but the range is what matters for funding plans.

Bottom line: write the rules down, pre-commit position sizes, and let prices come to you. Year-end usually rewards discipline, not heroics.

Frequently Asked Questions

Q: Should I worry about missing the first leg of a rally if the Fed’s cutting in 2025?

A: A little, yeah, markets usually move before the press conference soundbite. The multiple re-rates on expectations, then earnings catch up later. If you’re underweight duration right now, phase in: set a schedule (weekly/biweekly) for adds to broad tech or quality growth, and keep some dry powder for pullbacks. Don’t swing for fences; just get off zero exposure.

Q: How do I position for 2025 Fed cuts without trying to time every CPI print?

A: Use a barbell and automate it. On one side, add duration-sensitive growth (quality software, semis, broad tech via QQQ or SCHG). On the other, add rate-sensitive cyclicals: small caps (IWM), select REITs (VNQ), homebuilders (ITB), and utilities (XLU) if you want defensives. Stagger entries over 6-8 weeks, and rebalance quarterly. Screening-wise: prioritize positive free cash flow, net debt/EBITDA under ~2.5x, and interest coverage >5x. Keep 10-20% in short Treasuries or cash for optionality. If you’re nervous, hedge tail risk with a small TLT or rate receiver exposure, just size it so a bad day doesn’t wreck your week.

Q: What’s the difference between stocks that benefit from lower discount rates vs. lower interest expense?

A: Two levers, different clocks. Lower discount rates help “long-duration” equities first, think high-growth, high-multiple names where more of the value sits in out-year cash flows (large-cap tech, software, some biotech). Their earnings don’t change immediately; the valuation math does. Lower interest expense helps debt-heavy companies on a lag: small caps with floating-rate loans, leveraged industrials, REITs, and parts of consumer discretionary. Their P&Ls improve as debt reprices over quarters. Translation: discount-rate winners pop early; debt-relief winners build over time as interest costs reset.

Q: Is it better to load up on tech now or overweight small caps/REITs as 2025 cuts continue?

A: Neither “all tech now” nor “all small caps later.” The cycle tends to arrive in phases. Markets usually price the path of rates first, multiples expand on belief, not paperwork. That’s why quality growth and other duration plays often lead at the start of easing. Then, with a lag of 1-4 quarters, companies with real interest burden relief (floating-rate or rolling maturities) see earnings tailwinds, and that’s where small caps, select REITs, and some cyclicals can catch a second leg.

Practical approach I use with clients (and my own acct, fwiw):

• Core (40-55%): Quality growth via diversified tech/semi exposure (QQQ, SCHG) plus profitable software. Screen for positive FCF, gross margins >60%, and no net use. This captures the early multiple shift.
• Rate-sensitives (25-35%): Small caps (IWM or SLY), select REITs (VNQ; focus on sectors with pricing power like industrials and data centers), homebuilders (ITB). Screen for interest coverage >3x and weighted-average debt maturity >3 years to avoid near-term refi pain.
• Defensives and ballast (10-20%): Short Treasuries/cash for opportunistic buys; a measured dose of duration (IEF/TLT) if you want convexity to deeper cuts.

Risk checks: avoid “zombie” balance sheets (net debt/EBITDA >4x, negative FCF), don’t chase story stocks that only work if money is free again, and remember that if cuts are tied to weakening growth, credit risk can offset the rate gift. Tactically, leg in across weeks, use earnings-season dips, and be willing to rebalance if small-cap breadth actually improves, because when financing costs reset, those moves can snowball quickly.

@article{which-stocks-benefit-from-2025-fed-cuts-timing-is-key,
    title   = {Which Stocks Benefit From 2025 Fed Cuts? Timing Is Key},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/stocks-benefit-2025-fed-cuts/}
}