Visa and Wells Fargo Poised to Thrive as Interest Rates Rise

The Federal Reserve raised interest rates for the first time in three years, bringing the target range to 3.75% to 4%. This move was expected by the market, with at least one more rate hike anticipated this year and potentially two, according to CME Group's FedWatch tool.

Despite higher rates typically putting pressure on stocks, some companies have business models that perform better in a rising-rate environment. Two such stocks are Visa (NYSE: V) and Wells Fargo.

Visa, the largest payments network in the world, is well-suited to handle elevated interest rates. The company charges a fee as a percentage of each transaction, taking advantage of robust economic activity and increased spending through its network. Visa's third quarter fiscal 2026 saw payments volume and processed transactions rise 10% year over year, while net revenue jumped 14%. The company expects net revenue growth to be in the low-double-digit percentage range.

Wells Fargo, on the other hand, may seem like a typical bank that would suffer from rising interest rates. However, its net interest income has largely moved higher during the past year, making up more than 54% of total revenue in the second quarter. The company's credit looks benign, with total nonperforming assets trending down.