“Don’t fight the Fed” is more than a cliché — it’s a practical framework. In the latest Market on Close livestream, John Rowland, CMT, and “Twitter Tom” discuss historical data from Carson Group showing that stocks tend to hold up well when the Fed cuts rates while we’re trading near highs. 

Below, we unpack the “why,” outline a sector playbook for a September rate cut, and show how to use Barchart tools to build a simple, disciplined plan.

Watch this quick clip for the highlights, then catch the full show for the deeper discussion.

Why Rate Cuts Matter For Markets, in Plain English

Rate cuts lower borrowing costs, which translates to easier financing for companies and consumers, and potential support for earnings and spending.

Risk appetite often improves when policy shifts from “restrictive” toward “accommodative.”

Rotations happen, meaning market leadership can broaden beyond a handful of mega-caps as investors hunt for value and cyclical exposure.

On the show, Tom cites research from Ryan Detrick of Carson Group showing that when the Fed cuts rates with the S&P 500 Index ($SPX) within ~2% of all-time highs, the index finished positive over the next 12 months on every occasion. It’s a compelling data point — not a guarantee — but it’s the kind of historical context that helps frame expectations.

A Sector Playbook if The Fed Cuts

1) Industrials

• Why: Lower rates can unlock capex, infrastructure spending, and logistics/transport demand.
• What to track: Order backlogs, margins, and pricing power.

2) Financials

• Why: Credit costs can ease and loan demand can recover. (Net interest margins can be mixed; watch the curve.)
• What to track: Deposit trends, loan growth, and capital ratios at the big banks; regional bank sensitivity to funding costs.

3) Homebuilders & Housing Complex

• Why: Mortgage rates often drift down after policy shifts, reviving demand.
• What to track: New orders, cancellations, incentives, and build-to-rent exposure.

4) Potential rotation out of crowded tech leadership

• Why: After long bull runs in the tech sector (XLK), leadership sometimes pauses as breadth expands.
• What to track: Relative strength vs. equal-weight indexes; watch for a “broadening” tape.

5) Small-caps: Bonus watch

• Why: Smaller companies in the Russell 2000 ETF (IWM) are more rate-sensitive and can benefit from improved financing conditions.
• What to track: Interest coverage, refinancing needs, and earnings revisions.

How To Prepare Step-by-Step with Barchart

A) Find opportunities fast with screeners

Stock Screener 

Filters to try:

• Sector = Industrials / Financials / Residential Construction
• RSI (look for 40–60 to find “in-trend, not stretched”)
• 50-MA > 200-MA (“Golden Cross” trend confirmation)
• Avg Volume > 1,000,000 (liquidity)
• Forward P/E or EV/EBITDA (valuation sanity check)

Save your screener and turn on daily email alerts, so new matches ping you automatically.

ETF Screener

• Quickly locate sector bets: Industrials (XLI), Financials (XLF), Homebuilders (ITB) (XHB), Small Caps (IWM).
• Add Performance, AUM, Expense Ratio, RSI to sort the list to your preference.

New Recommendations (ETFs & Stocks)

• See fresh signals (daily/weekly/monthly) generated by Barchart’s models (e.g., moving-average crossovers, TrendSeeker®).
• Use this tool as a watchlist builder, then verify signals & setups on the charts.

B) Validate with charts & templates

Open Interactive Chart → add a simple template:

• Moving Averages (20/50/200-day), RSI(14), ADX(14) for trend strength, plus Volume.
• Use Flipcharts to speed-scan your screener results/watchlists with the same template applied.

Tips for sectors discussed on the show:

• Industrials: Look for pullbacks to rising 20/50-DMA within broader uptrends.
• Financials: Watch breakouts on volume; confirm with improving Money Flow or On-Balance Volume.
• Homebuilders: Track RSI turning up from 40–50 zones; watch new-orders headlines in the news.

C) Build & monitor like a pro

Watchlists: Create three focused lists — Industrials, Financials, Homebuilders.

• Related ETFs (from a stock’s Overview): Quickly see funds that hold a company you like — handy for thematic or diversified exposure.
• Holdings View (on an ETF): See the top positions so you know exactly what’s driving the ETF (and save those holdings as a watchlist to track leaders).

Alerts:

• Price at prior highs/lows
• RSI crossing key levels
• MA crossovers (50/200)

Economic Calendar: Flag FOMC, jobs, CPI/PPI, and housing data drops that can move your Fed-cut thesis.

Bottom Line

If the Fed does cut in September, you don’t need predictions; you need a process. The Market on Close discussion points you toward likely sector beneficiaries (industrials, financials, homebuilders, small caps), and the tools on Barchart help you filter, validate, and monitor with less guesswork.

Watch the Clip: Sectors in Focus on a September Rate Cut

On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.