Rate-Sensitive Stocks Ready to Soar on Soft CPI Print

Wall Street is bracing for this Friday's CPI report, which could determine whether the Federal Reserve raises interest rates next week.

The August CPI is expected to rise 0.4% from July and 3.4% from a year earlier, while core inflation is forecast at 0.2% monthly and 2.4% annually.

Markets are pricing roughly a 70% chance of a quarter-point Fed hike, while the 10-year Treasury yield has climbed close to 5%.

A softer core reading could give five rate-sensitive stocks an outsized lift, particularly those directly exposed to housing turnover and financing conditions.

Opendoor is one such stock, as lower Treasury yields can feed into cheaper mortgages, improving transaction activity while easing the cost of holding homes on its balance sheet. JPMorgan analyst Dae K Lee remains constructive even without a macro recovery, maintaining an Overweight rating and $8 target, arguing Opendoor 'could reach ANI profitability' with no housing rebound required.

Another stock benefiting from lower rates is Rocket Companies, as mortgage demand is highly sensitive to borrowing costs. Morgan Stanley analyst Jeffrey Adelson upgraded Rocket to Overweight with a $19 target, forecasting 'strong EPS growth from here.'

Affirm stands to benefit if cooler inflation reduces funding pressure while keeping consumer borrowing affordable enough to support transaction growth. Loop Capital recently initiated coverage with a Buy rating and $105 target.

Carvana's sensitivity comes through vehicle affordability, as used-car buyers focus heavily on monthly payments, making financing rates a major part of purchasing power. Lower borrowing costs can improve affordability without requiring Carvana to cut vehicle prices aggressively.

Citizens analyst Andrew Boone recently lowered his target to $83 but continued to describe Carvana as a 'Structural Winner.'

Finally, Coinbase has the least direct operational connection to interest rates but could react explosively if CPI triggers a broader risk-on reversal. A cooler reading could pull Treasury yields and the dollar lower, reduce Fed-hike expectations, and support Bitcoin and other cryptocurrencies.