If the Fed Keeps Cutting Rates, History Says These 3 Industrial Stocks Win

The Federal Reserve recently raised its benchmark interest rates by 25 basis points to 3.75%-4.00%, its first increase in three years. This decision caused bond and CD issuers to raise their yields to remain competitive, prompting many investors to shift from speculative stocks to fixed-income investments. The forward valuations for growth stocks also suffered, highlighting their substantial losses and high debt levels.

However, the upcoming Democratic takeover of Congress in midterms may pressure the Trump Administration to end the Iran war, potentially leading to a decline in oil prices, a cooling of inflation, and the Fed's ability to cut interest rates again. If this happens, investors may once again turn to higher-growth industrial stocks that have retreated in recent months.

Three such stocks worth considering are SpaceX (SPCX), Rivian (RIVN), and Joby Aviation (JOBY). SpaceX has been growing rapidly, with its revenue nearly doubling year-over-year in the first nine months of 2026. It projects a 162% growth for the full year and a 271% surge in adjusted EBITDA as it turns profitable again, primarily due to its Starlink business.

Despite its high valuation at 39 times current sales, SpaceX trades at just 11 times next year's sales and six times its projected 2028 sales, making it an attractive growth stock for long-term investors. Rivian, once a top EV stock, now trades more than 80% below its IPO price and is valued at less than two times next year's sales.

However, it expects its annual deliveries to increase significantly this year, driven by its new SUV, the R2. If Rivian meets its revenue growth estimates of 42% CAGR from 2025 to 2028, it could once again become a high-growth EV stock. Joby Aviation, an early player in the electric vertical takeoff and landing market, has lost nearly 50% of its value since going public five years ago.

Despite its recent losses and the FAA's certification process, Joby remains ahead of its competitors and has top backers like Toyota, Delta Air Lines, and Uber. If Joby can achieve its projected revenue growth of 120% CAGR from 2025 to 2028, its stock could be reasonably valued at 15 times its 2028 sales. As the Motley Fool's Stock Advisor points out, following their recommendations could yield significant returns, with an average return of 850% compared to 210% for the S&P 500.