goods

The Federal Reserve just cut interest rates. The goal was, basically, to protect the U.S. economy from falling into a recession.

Wall Street is expecting additional rate cuts from here, which could lead to positive outcomes for these three consumer goods companies. Each one comes with a different set of risks and potential rewards. Here’s why these stocks could be worth examining today, before more rate cuts are made.

Image source: Getty Images.

1. Target isn’t resonating with consumers right now

Target (TGT) is a large big box retailer, offering a range of products under one roof. It competes directly with Walmart (WMT 0.64%). That’s an important comparison point because Target is doing poorly right now and Walmart is doing quite well. To put numbers on that, Target’s same-store sales fell 1.9% in the second quarter of 2025 while Walmart’s same store sales rose 4.6% in its U.S. locations.

The big difference is that Target’s business model is to offer a more premium experience, while Walmart is squarely about its everyday low prices ethos. Consumers worried about the economy and inflation, which The Motley Fool’s research shows can ravage the buying power of the dollar, appear to be voting with their feet. However, if Federal Reserve rate cuts lead to a growth uptick, consumers could trade back up to Target.

Just such a shift has happened before, so expecting it to happen again isn’t a big stretch in a sector driven by consumer sentiment. That said, Target’s shares are down more than 40% from their 52-week high, making them look relatively cheap. And the Dividend King is offering an attractive 5% yield that’s backed by over five decades of annual dividend increases.

2. Lululemon is a luxury basics clothing retailer

The story around Lululemon (LULU -0.75%) is roughly similar to that of Target. Lululemon makes athletic wear basics. However, the cost of these basics is very high, so it is really a luxury retailer. To be fair, there’s a fashion twist here and the company has made past design missteps that can’t be ignored. But overall, it has been on trend more than it has been off trend.

But one thing Lululemon can’t control is the swings in the economy and how customers react to those swings. The company’s second quarter results weren’t bad if you take a top-level view of the income statement, with revenues up 7% and same-store sales up 1%. But that was entirely driven by international growth, with sales up just 1% in the Americas and same store sales off by 4%.

It clearly looks like consumers in the Americas are pulling back on what are really discretionary purchases, despite the basic nature of the items. If rate cuts make consumers more confident in the economy again, that trend could change. With the stock down more than 50% from its 52-week high, there could be some turnaround appeal here for more aggressive investors.

3. Coca-Cola is boring and doing fairly well

Coca-Cola (KO -0.83%), the last stock up on this list, is appropriate for conservative investors. The shares are only down around 10% from their 52-week highs. But that’s enough to have pushed the stock’s price-to-sales and price-to-earnings ratios below their five-year averages. It wouldn’t be fair to suggest that Coca-Cola is trading hands at fire-sale prices, but it does appear fairly priced to a little cheap. The stock doesn’t go on sale very often, so this could be a good opportunity for long-term investors who place a high value on dividends.

On the dividend front, the beverage giant is a Dividend King with over six decades of annual dividend increases behind it. The yield is notably above the market at nearly 3.1%. And it is one of the largest and best-run consumer staples companies on the planet. If you are risk averse, Coca-Cola is a solid option. And economic growth driven by rate cuts could make it that much easier for consumers to justify splurging on what is basically very expensive water.

There’s plenty of benefit to go around from rate cuts

Federal Reserve rate cuts are a bit of a blunt instrument when it comes to impacting the economy. But they can be very effective at freeing up capital for investment. If there are more rate cuts to come, as Wall Street seems to expect, Target, Lululemon, and Coca-Cola could all benefit if the outcome is continued, if not stronger, economic growth. The upside at Target and Lululemon is more material, but Coca-Cola shows that even the most conservative investors can get in on the rate-cut investment opportunity.

Trump had imposed a 40 percent US tariff on Brazilian goods in July on top of a 10 percent one earlier even though the United States has a trade surplus with Brazil.

Brazilian President Luiz Inacio Lula da Silva has asked United States President Donald Trump to lift the 40 percent tariff imposed by the US government on Brazilian imports.

The leaders spoke for 30 minutes by phone on Monday. During the call, they exchanged phone numbers in order to maintain a direct line of contact, and President Lula reiterated his invitation for Trump to attend the upcoming climate summit in Belem, according to a statement from Lula’s office.

Shortly after, Trump posted on his Truth Social platform that he had had a good conversation with Lula.

“We discussed many things, but it was mostly focused on the Economy, and Trade, between our two Countries,” Trump said.

He added that the leaders “will be having further discussions, and will get together in the not too distant future, both in Brazil and the United States”.

The Trump administration had imposed a 40 percent tariff on Brazilian products in July on top of a 10 percent tariff imposed earlier. Lula reminded Trump that Brazil was one of three Group of 20 (G20) countries with which the US maintains a trade surplus, according to the Brazilian leader’s office.

The Trump administration has justified the tariffs by saying that Brazil’s policies and criminal prosecution of former President Jair Bolsonaro constitute an economic emergency.

Earlier this month, Bolsonaro was convicted of attempting a coup after losing his bid for re-election in 2022, and a panel of the Supreme Court sentenced him to 27 years and three months in prison.

In September, Trump and Lula had a brief encounter at the sidelines of the UN General Assembly in New York, with Trump hailing their “excellent chemistry”.

During Monday’s call, Lula also offered to travel to Washington to meet with Trump, his office said.

More than 20 leaders from non-Western nations gathered in Tianjin, China over the weekend for the Shanghai Cooperation Organisation (SCO) summit, which concluded on Monday, and at which President Xi Jinping set out his vision for a global economic order with the Global South at its centre.

Against the backdrop of new global tariffs imposed by United States President Donald Trump, Xi told delegates: “We must continue to take a clear stand against hegemonism and power politics, and practise true multilateralism.”

The summit brought together some of the strongest emerging economies, including India and Russia, which, along with China, account for more than one-fifth of the world’s gross domestic product (GDP).

Trilateral trade between China, India and Russia accounted for $452bn in 2023, up from $351bn in 2022, according to the Observatory of Economic Complexity (OEC).

Seen as an alternative power structure to most US-led international institutions, the 10-member SCO includes much of Central Asia, Russia, China, India, Iran, Pakistan and Belarus, and represents about 43 percent of the world’s population and 23 percent of global GDP.

Beijing’s push for multilateralism is coming at a time of rising grievances with Washington, whose trade tariff policies have provided SCO members with common ground to work on.

Which countries buy the most from China?

China has a diverse range of trading partners.

Its largest buyer is the US, which imported $442bn or 12.9 percent of China’s total exports in 2023 – mainly consisting of electronics, machinery, consumer goods and telecommunications equipment.

Regionally, Asia is the main destination for China’s exports, accounting for $1.6 trillion of goods, with India alone receiving $120bn, or 3.1 percent of China’s total exports.

In Europe, China exported $819bn worth of goods, with the main destinations being Germany ($151bn), Russia ($110bn) and the UK ($95.3bn).

Which countries buy the most from India?

The US is also the largest buyer of Indian goods.

In 2023, the US bought goods worth $81.4bn, or 17.9 percent of India’s total exports, mostly medications and pharmaceutical products, followed by precious stones, machinery and textiles.

Regionally, Asia is also the main destination for India’s exports, accounting for $178bn of goods, with the UAE being India’s second largest destination for exports, at $31.4bn, or 6.9 percent of India’s total exports, mainly jewellery and refined petroleum.

The Netherlands is India’s third-biggest export market at $22.5bn, with refined petroleum being the largest export item, worth $15bn. China is India’s fourth-largest export market and second-largest in the Asia region.

On August 6, US President Donald Trump announced a 50 percent tariff on Indian imports, citing India’s continued purchase of discounted Russian crude oil as the primary reason.

In response, India expressed strong disapproval, calling the tariffs “unfair, unjustified, and unreasonable”, and reaffirmed its sovereign right to determine its energy policies independently. Despite the US pressure, India continued to import Russian oil, attracted by substantial discounts offered by Moscow.

Which countries buy the most from Russia?

Before the Ukraine war, Russia’s trading partners were much more diversified.

While China was its largest trading partner, accounting for 14.6 percent ($72.1bn) of Russian exports in 2021, according to the Observatory of Economic Complexity (OEC), Russia also had a broad range of European partners. The Netherlands was Russia’s second-largest partner, with 8 percent ($39.5bn) of total exports, followed by the US at 5.5 percent ($27.3bn).

After Russia’s invasion of Ukraine in February 2022, heavy sanctions sharply reduced trade with many Western nations.

By 2023, China accounted for about one-third ($129bn) of Russia’s exports, followed by India at 16.8 percent ($66.1bn) and Turkiye at 7.9 percent ($31bn), according to the OEC, making the Asia region the bulk recipient of Russian goods, with more than three-quarters of Russia’s exports heading there.

What do China and Russia trade most?

In 2023, China exported $110bn worth of goods to Russia, led by machinery and transport equipment. According to the OEC, the top export items from China to Russia were cars.

That same year, Russia sold $129bn worth of goods to China – mostly mineral products, including oil and natural gas.

In recent years, Russia has run a trade surplus with China, mostly due to energy products, which make up nearly three-quarters of its exports.

What do India and Russia trade most?

India runs a major trade deficit with Russia, importing far more than it exports.

In 2023, Russia sold $66.1bn worth of goods to India, with energy products – primarily crude oil and natural gas – making up about 88 percent of these imports, much of which India buys at a discounted rate.

India’s exports to Russia are more diversified, totalling $4.1bn in 2023, with significant contributions from chemical products, machinery and metals.

What do China and India trade most?

India runs a major trade deficit with China, importing about seven times more goods by dollar value than it exports.

In 2023, China exported $125bn worth of goods to India, mainly machinery and chemical products, while India exported $18.1bn worth of goods to China, with oil and fuel-related products comprising the largest share of its exports.

US president recently imposed 50 percent tariff on Indian goods and denounced New Delhi for buying Russian oil.

United States President Donald Trump has criticised his country’s relationship with India as “very one-sided” and stated that New Delhi had offered to reduce tariffs on US goods to zero.

Trump castigated New Delhi for what he depicted as a slanted economic relationship and India’s purchases of Russian weapons and oil in a social media post on Monday, marking a further deterioration of ties between the two countries.

“What few people understand is that we do very little business with India, but they do a tremendous amount of business with us. In other words, they sell us massive amounts of goods, their biggest ‘client,’ but we sell them very little,” Trump said in a post on Truth Social.

“They have now offered to cut their Tariffs to nothing, but it’s getting late. They should have done so years ago,” he added.

New Delhi has yet to comment on Trump’s most recent remarks, and the US president has often made unfounded claims about other countries offering the US extravagant economic concessions amid the threat of high tariffs.

The post is the latest instance of Trump hitting out at India, previously seen as a partner of great significance as the US seeks to strengthen relationships with Asian nations sceptical of China’s growing regional power.

The US recently imposed tariffs as high as 50 percent on goods from India – among the highest announced by the Trump administration on scores of foreign nations – and criticised India for its purchase of Russian oil.

Trump’s tariff push has often been accompanied by exhortations to foreign leaders to buy more US products in areas such as energy and weapons manufacturing.

“India buys most of its oil and military products from Russia, very little from the US,” he said on Monday.

But India has pushed back against the severe tariffs imposed by Washington with Commerce and Industry Minister Piyush Goyal recently stating that New Delhi “will neither bow down nor ever appear weak” in its economic relationships with other countries.

Trump’s aggressive efforts to reshape trade with the rest of the world, which he has depicted as one-sided and unfair to the US, could be pushing other countries into more collaborative relationships as they seek alternatives to an increasingly unpredictable US.

At a recent summit convened by China aimed at bolstering ties between non-Western nations, Indian Prime Minister Narendra Modi told Chinese President Xi Jinping that he is committed to improving their relationship.

New US tariffs covering 407 products will take effect immediately.

The United States Commerce Department is set to hike steel and aluminium tariffs on more than 400 products including wind turbines, mobile cranes, bulldozers and other heavy equipment, along with railcars, furniture and hundreds of other products.

The government agency announced the new development on Tuesday.

The department said 407 product categories are being added to the list of “derivative” steel and aluminium products covered by sectoral tariffs, with a 50 percent tariff on any steel and aluminium content of these products.

The department is also adding imported parts for automotive exhaust systems and electrical steel needed for electric vehicles to the new tariffs.

A group of foreign automakers had urged the department not to add the parts, saying the US does not have the domestic capacity to handle current demand.

The new tariffs take effect immediately and also cover compressors and pumps.

“Today’s action expands the reach of the steel and aluminum tariffs and shuts down avenues for circumvention – supporting the continued revitalisation of the American steel and aluminum industries,” said Under Secretary of Commerce for Industry and Security Jeffrey Kessler.

Steelmakers including Cleveland-Cliffs had petitioned the administration to expand the tariffs to include additional steel and aluminium auto parts.

Since returning to the presidency, Trump has imposed a 10 percent tariff on almost all US trading partners, alongside varying steeper levels on dozens of economies such as the European Union and Japan.

Certain sectors have been spared from these countrywide tariff levels, but instead were targeted under different authorities by even higher duties.

Some businesses have already had to raise prices because of increased tariffs. On Tuesday, on the heels of its earnings report, Home Depot said it would need to raise prices on imported goods that it sells.

“There will be modest price movement in some categories,” Home Depot Chief Financial Officer Richard McPhail said on a Tuesday conference call.

Other brands that have recently announced price increases include the world’s largest consumer goods company, Procter and Gamble, which last month said it would need to raise prices on a quarter of the goods it produces.

WASHINGTON — President Trump announced a trade deal with Vietnam on Wednesday that would allow U.S. goods to enter the country duty-free.

Vietnamese exports to the United States, by contrast, would face a 20% levy.

On his Truth Social platform, Trump declared the pact “a Great Deal of Cooperation between our two Countries.’’

In April, Trump announced a 46% tax on Vietnamese imports — one of his so-called reciprocal tariffs targeting dozens of countries with which the United States runs trade deficits. Trump promptly suspended the reciprocal tariffs for 90 days to allow for negotiations like the one with Vietnam. The pause expires Tuesday, but so far the Trump administration has reached a trade agreement with only one of those countries — the United Kingdom. (Trump has also reached a “framework’’ agreement with China in a separate trade dispute.)

“Vietnam has been very keen to get out from under this,’’ said Mary Lovely, senior fellow at the Peterson Institute for International Economics. “This is forcing a smaller country to eat it, basically. We can do that. It’s the big countries that everybody’s keeping their eyes on.’’ She doubts that Trump will be able to impose such a lopsided agreement on big trading partners such as the European Union and Japan.

The United States last year ran a $122-billion trade deficit with Vietnam. That was the third-biggest U.S. trade gap — the difference between the goods and services it buys from other countries and those it sells them — behind the ones with China and Mexico.

In addition to the 20% tariffs, Trump said the U.S. would impose a 40% tax on “transshipping’’ — goods from another country that stop in Vietnam on their way to the United States. Washington complains that Chinese goods have been dodging higher U.S. tariffs by transiting through Vietnam.

A February study in the Harvard Business Review found that there was “much less rerouting than previously believed.’’

In May, Vietnam approved a $1.5-billion project by the Trump Organization and a local partner to build a massive golf resort complex near Hanoi, covering an area roughly the size of 336 football fields.

Vietnam was a beneficiary of American efforts to counter China’s influence. Companies looking to diversify supply chains away from China flocked to Vietnam.

In 2023, it became the only country to host both former President Joe Biden and Chinese leader Xi Jinping on state visits. That year, the U.S. upgraded Vietnam to its highest diplomatic status — comprehensive strategic partner — placing it on par with China and Russia.

Wiseman and Ghosal write for the Associated Press. Ghosal reported from Hanoi, Vietnam.