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Goldman Sachs posted record Q2 revenues and earnings as capital-markets activity remained strong.
Interactive Brokers saw net interest income rise 23% as client equity and trading activity grew.
Talos Energy generated $231.6 million in adjusted free cash flow and raised 2026 production guidance.
The Federal Reserve has shifted back toward tighter monetary policy as persistent inflation limits room to lower interest rates. On Sept. 16, the Fed raised the federal funds target range by 25 basis points to 3.75%-4%, its first rate hike since 2023. The decision came as policymakers assessed inflation as elevated even as economic activity continued to expand and domestic spending remained resilient.
September economic projections also point to a higher-for-longer rate environment. Policymakers raised their median 2026 federal funds rate forecast to 4.1% from 3.8% in June, while lifting their 2026 PCE inflation projection to 3.7% from 3.6%. This backdrop could keep interest rates elevated and increase the importance of balance-sheet strength, funding costs and interest income for rate-sensitive financial companies.
Against this backdrop, it’s time for investors to focus on companies that can potentially benefit from elevated rates, sustained financial-market activity and persistent energy-price pressure. Here are three stocks to consider — Goldman Sachs (GS - Free Report) , Interactive Brokers Group (IBKR - Free Report) and Talos Energy (TALO - Free Report) .
Persistent Inflation Keeps Pressure on Rates
Recent economic data help explain the Fed's stance. August CPI increased 3.4% year over year and 0.4% month over month, while core CPI rose 2.4% year over year. The monthly increase was the largest since May, with gasoline accounting for more than one-third of the overall rise.
The labor market also showed renewed strength in August. Nonfarm payrolls increased 162,000, well above the prior 12-month average monthly gain of 31,000, while the unemployment rate held at 4.1%. Average hourly earnings increased 3.1% year over year.
Consumer spending provided another source of support for economic activity. Retail and food-services sales rose 1.2% month over month and 6% year over year in August, according to the Census Bureau.
Together, elevated inflation, payroll growth and firm consumer spending provide a backdrop in which interest rates could remain an important earnings driver for financial companies. This favors businesses positioned to generate interest income and maintain strong profitability as borrowing costs remain elevated.
Our Picks
Goldman Sachs: It is well positioned for a higher-rate environment through its diversified Global Banking & Markets and Asset & Wealth Management businesses. Goldman Sachs reported record second-quarter 2026 net revenues of $20.34 billion and net earnings of $6.63 billion. Annualized return on equity was 23.5%. Its Global Banking & Markets franchise also posted record quarterly net revenues, reflecting strength across its businesses. The combination of strong capital-markets activity and diversified revenue streams supports the investment case as rates remain elevated.
Based on short-term price targets offered by 21 analysts, the average price target for Goldman Sachs represents an increase of 23.19% from the last closing price of $951.47. The stock currently holds a Zacks Rank #2 (Buy), with two upward full-year earnings estimate revisions and none lower over the past two months.
Image Source: Zacks Investment Research
Interactive Brokers: It is positioned to benefit from the combination of elevated interest rates and sustained market activity. Its business generates substantial net interest income from customer balances and margin loans, making interest rates an important earnings driver. In the second quarter of 2026, net interest income increased 23% year over year, while commission revenues rose 30%. Client equity increased 40% year over year, while daily average revenue trades climbed 36%.
More recently, August brokerage metrics showed 27.57 million orders and $614.49 trillion in total traded value. The combination of higher interest income and strong client trading activity gives IBKR relevant exposure to the current higher-rate environment.
Based on short-term price targets offered by 10 analysts, the average price target for Interactive Brokers represents an increase of 23.33% from the last closing price of $88.38. The stock currently holds a Zacks Rank #1 (Strong Buy), with three upward full-year earnings estimate revisions and none lower over the past two months.
Image Source: Zacks Investment Research
Talos Energy: It provides a non-financial way to participate in the broader inflation and energy-price backdrop. This oil and gas producer generated $300.6 million in operating cash flow and $231.6 million in adjusted free cash flow in the second quarter of 2026. It ended the quarter with $577.6 million of cash and net debt equal to just 0.5 times trailing-12-month adjusted EBITDA. Talos also raised its 2026 production guidance midpoint to 89 thousand barrels of oil equivalent per day.
Based on short-term price targets offered by 10 analysts, the average price target for Talos Energy represents an increase of 16.62% from the last closing price of $17.15. The stock currently sports a Zacks Rank #1, with two upward full-year earnings estimate revisions and none lower over the past two months. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Fed Turns Hawkish Again: 3 Stocks to Buy Amid Higher Rates
Key Takeaways
The Federal Reserve has shifted back toward tighter monetary policy as persistent inflation limits room to lower interest rates. On Sept. 16, the Fed raised the federal funds target range by 25 basis points to 3.75%-4%, its first rate hike since 2023. The decision came as policymakers assessed inflation as elevated even as economic activity continued to expand and domestic spending remained resilient.
September economic projections also point to a higher-for-longer rate environment. Policymakers raised their median 2026 federal funds rate forecast to 4.1% from 3.8% in June, while lifting their 2026 PCE inflation projection to 3.7% from 3.6%. This backdrop could keep interest rates elevated and increase the importance of balance-sheet strength, funding costs and interest income for rate-sensitive financial companies.
Against this backdrop, it’s time for investors to focus on companies that can potentially benefit from elevated rates, sustained financial-market activity and persistent energy-price pressure. Here are three stocks to consider — Goldman Sachs (GS - Free Report) , Interactive Brokers Group (IBKR - Free Report) and Talos Energy (TALO - Free Report) .
Persistent Inflation Keeps Pressure on Rates
Recent economic data help explain the Fed's stance. August CPI increased 3.4% year over year and 0.4% month over month, while core CPI rose 2.4% year over year. The monthly increase was the largest since May, with gasoline accounting for more than one-third of the overall rise.
The labor market also showed renewed strength in August. Nonfarm payrolls increased 162,000, well above the prior 12-month average monthly gain of 31,000, while the unemployment rate held at 4.1%. Average hourly earnings increased 3.1% year over year.
Consumer spending provided another source of support for economic activity. Retail and food-services sales rose 1.2% month over month and 6% year over year in August, according to the Census Bureau.
Together, elevated inflation, payroll growth and firm consumer spending provide a backdrop in which interest rates could remain an important earnings driver for financial companies. This favors businesses positioned to generate interest income and maintain strong profitability as borrowing costs remain elevated.
Our Picks
Goldman Sachs: It is well positioned for a higher-rate environment through its diversified Global Banking & Markets and Asset & Wealth Management businesses. Goldman Sachs reported record second-quarter 2026 net revenues of $20.34 billion and net earnings of $6.63 billion. Annualized return on equity was 23.5%. Its Global Banking & Markets franchise also posted record quarterly net revenues, reflecting strength across its businesses. The combination of strong capital-markets activity and diversified revenue streams supports the investment case as rates remain elevated.
Based on short-term price targets offered by 21 analysts, the average price target for Goldman Sachs represents an increase of 23.19% from the last closing price of $951.47. The stock currently holds a Zacks Rank #2 (Buy), with two upward full-year earnings estimate revisions and none lower over the past two months.
Image Source: Zacks Investment Research
Interactive Brokers: It is positioned to benefit from the combination of elevated interest rates and sustained market activity. Its business generates substantial net interest income from customer balances and margin loans, making interest rates an important earnings driver. In the second quarter of 2026, net interest income increased 23% year over year, while commission revenues rose 30%. Client equity increased 40% year over year, while daily average revenue trades climbed 36%.
More recently, August brokerage metrics showed 27.57 million orders and $614.49 trillion in total traded value. The combination of higher interest income and strong client trading activity gives IBKR relevant exposure to the current higher-rate environment.
Based on short-term price targets offered by 10 analysts, the average price target for Interactive Brokers represents an increase of 23.33% from the last closing price of $88.38. The stock currently holds a Zacks Rank #1 (Strong Buy), with three upward full-year earnings estimate revisions and none lower over the past two months.
Image Source: Zacks Investment Research
Talos Energy: It provides a non-financial way to participate in the broader inflation and energy-price backdrop. This oil and gas producer generated $300.6 million in operating cash flow and $231.6 million in adjusted free cash flow in the second quarter of 2026. It ended the quarter with $577.6 million of cash and net debt equal to just 0.5 times trailing-12-month adjusted EBITDA. Talos also raised its 2026 production guidance midpoint to 89 thousand barrels of oil equivalent per day.
Based on short-term price targets offered by 10 analysts, the average price target for Talos Energy represents an increase of 16.62% from the last closing price of $17.15. The stock currently sports a Zacks Rank #1, with two upward full-year earnings estimate revisions and none lower over the past two months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research