Jim Cramer names stocks to buy in the wake of the Fed’s rate cut

After the Federal Reserve cut the benchmark borrowing rate by 25 basis points, CNBC’s Jim Cramer shared a few types of stocks he thinks are solid buys in the current economic environment.

“The Fed’s still on the side of the bulls because it’s still in easing mode, even if the current economic data is unclear,” he said. “That means we don’t have to fight the Fed when we buy stocks.”

The central bank lowered interest rates even as members were split on the decision — some feared a cut would fire up inflation, while others felt a cut was necessary to strengthen the job market. Fed Chair Jerome Powell indicated future rate hikes are unlikely, but he struck a cautious tone regarding cuts in 2026.

The averages climbed on Wednesday as investors celebrated the third consecutive rate cut and bet the Fed would continue to ease next year. The Dow Jones Industrial Average gained 1.05%, while the S&P 500 added 0.67% and the Nasdaq Composite advanced 0.33%.

Lower rate cuts bode well for homebuilders and related retailers, Cramer said, naming Toll Brothers and Home Depot. He recommended transports, such as trucking company J.B. Hunt as well as FedEx, especially as the holiday season is underway. Cramer also named Union Pacific and Norfolk Southern, lauding the train companies’ potential merger. He said industrials also benefit from lower rates and pointed to Caterpillar and Cummins.

Expensive stocks already doing well might also be poised for more success, Cramer continued, suggesting Wall Street will continue to pay up for these companies. He named Palantir, noting that the company just secured a contract with the U.S. Navy.

“Just make sure you don’t get bearish when the time is right to be bullish going into the end of the year,” he said.