When the Federal Reserve cuts interest rates, like it did in September 2025, the best sectors to watch are those tied to consumer spending. Lower borrowing costs ease credit card pressures and free up cash for discretionary purchases. This is why airline stocks have seen such strong momentum in recent quarters, a trend that is likely to continue in the short term.
Among exchange-traded funds (ETFs), the First Trust Nasdaq Transportation ETF (NASDAQ: FTXR) has delivered a robust 11.6% return to its shareholders over the past quarter. Notably, most of the top holdings in this ETF are comprised of airline stocks.
