Interest Rates Are Rising. Here's the ETF I'd Buy to Profit From It.

There's a misconception that rising interest rates are a negative for U.S. stocks. In reality, it's a little more complicated than that. Higher rates affect different industries differently.

One sector that could get a tailwind is financials. Higher interest rates can actually improve their financial health, which is why I'd be looking to add the State Street Financial Select Sector SPDR ETF (NYSEMKT: XLF). But rates aren't the only thing it has going for it.

The case for this sector really begins with the Federal Reserve's path for interest rates. This month, it raised the fed funds rate by 25 basis points to a range of 3.75%-4%. The fed funds futures market is currently pricing in roughly 75 basis points of additional hikes by the June 2027 meeting.

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