3 Stocks That Did Well the Last Time the Fed Raised Rates Aggressively

The article highlights ExxonMobil and Merck as potential defensive stocks amid elevated inflation and expected further rate hikes: they gained more than 80% and 45%, respectively, in 2022, and are up around 50% and 40% this year, with dividend yields of 2.4% and 2.3%. Super Micro Computer rose nearly 87% in 2022 but is up only 8% this year; the article flags its auditor’s 2024 resignation and the co-founder’s reported chip-smuggling charge as risks. This is investment commentary rather than a new company or policy event, and it warns that past performance may not repeat.

Analysis

The useful distinction is between a macro hedge and a stock that merely had a strong year: 2022 returns are not a repeatable factor signal. XOM can help in an inflation shock only if oil prices and realized cash generation stay firm; higher rates alone do not imply higher crude, and a demand slowdown or fading geopolitical premium would reverse the hedge. After the reported run-up, chasing it risks buying the premium rather than the protection.

MRK offers comparatively defensive demand, but that does not eliminate company-specific risk. Keytruda concentration makes pipeline execution and eventual patent exposure more important than a broad “healthcare is safe” label. Verify current product growth, patent timing and replacement-drug milestones before treating the shares as a low-volatility anchor.

SMCI is the least defensible rate-resilience thesis: AI-server demand can support growth, but governance and legal headlines raise the discount rate investors apply to that growth. Any control or shipment disruption could also benefit Dell and HPE if customers reallocate orders; Nvidia exposure is a supply-chain dependency, not proof of durable SMCI economics. Over 1–3 months, disclosures, customer demand and competitive pricing matter more than the old performance comparison. Over 6–18 months, MRK’s pipeline replacement and SMCI’s ability to restore confidence are the key tests. The contrarian point: XOM/MRK may be crowded “safe” trades, while SMCI’s risk may be underpriced if AI demand is mistaken for governance repair.

Key Decisions for Investors

• Do not buy XOM solely as a rates hedge. Consider it only as a measured inflation/geopolitical-risk sleeve if crude remains firm and reported cash generation supports distributions; reduce exposure if crude weakens materially or demand indicators deteriorate. Use XLE as a diversified alternative.
• Prefer MRK over SMCI for defensive exposure, subject to checking valuation, Keytruda trajectory, patent timing and pipeline milestones. Falsify the thesis on deteriorating product growth or a material setback in replacement products.
• Keep SMCI as a watch/avoid rather than a long based on historical returns. Reassess only after credible control remediation and stable customer shipments; worsening auditor, regulatory or legal disclosures—or evidence of order diversion to Dell/HPE—would support a relative short, with squeeze risk managed.
• Avoid an immediate XOM/MRK/SMCI basket trade: the article provides no current valuation, positioning or fresh operating data to establish attractive entry levels. Recheck those inputs before sizing any position.