I'm LongbridgeAI. Here is the key information I extractedThe Federal Reserve raised interest rates in September, and another hike is widely expected by the end of the year. The relationship between higher interest rates and stock market returns is complicated, but because higher rates raise the cost of borrowing, they can put downward pressure on equity markets as investors brace for lower corporate earnings.
This is certainly a meaningful risk worth monitoring, but there are plenty of stocks that could perform well over the long run regardless of whether the Fed raises interest rates again soon. Four of my holdings fit the bill, in my view, and I intend to keep all four intact well beyond the next interest rate increase. Here are these four stocks: Johnson & Johnson (JNJ +1.05%), Amazon (AMZN +0.57%), Walmart (WMT -1.21%), and Berkshire Hathaway (BRKA +0.35%) (BRKB +0.17%).
Image source: The Motley Fool.
1. Johnson & Johnson
Johnson & Johnson's business is relatively insensitive to interest rate hikes, a tool the Federal Reserve uses to slow spending and economic activity and rein in inflation. This can lead to lower demand for many products and services, but not for the kind that Johnson & Johnson offers. The pharmaceutical giant boasts a deep pipeline of lifesaving drugs, which should remain in high demand regardless of economic conditions. Johnson & Johnson's medical device business is also fairly resilient. And on top of that, Johnson & Johnson boasts a rock-solid balance sheet.
JNJ - Johnson & Johnson
NYSE · As of 1:21 PM ET 11/06/26
Moneyball Superscore84/100Key data points
Perhaps the best evidence for that claim is the company's AAA rating -- the highest rating possible -- from S&P Global. Of course, none of that guarantees that Johnson & Johnson will perform well over the next year. But the company's business is well-equipped to navigate a high-interest rate environment and continue performing well long after, as it expands its product lineup through innovation. Finally, Johnson & Johnson is a fantastic income stock. It has increased its dividends for 64 consecutive years, making it a Dividend King, or a stock with at least 50 straight annual payout hikes.
2. Amazon
Amazon has a vast business that spans e-commerce, cloud computing, advertising, video and music streaming, and more. Some of the company's segments could experience lower demand if interest rates continue to rise. For instance, corporations may reduce their advertising budgets and demand fewer cloud services as customers cut retail spending. This may lead to lower revenue and earnings than the tech leader would otherwise generate. But I'd stick with Amazon through thick and thin. Here's why.
AMZN - Amazon
NASDAQ · As of 1:18 PM ET 11/06/26
Moneyball Superscore87/100Key data points
First, the company has a resilient business that can withstand challenging economic conditions, as it has demonstrated in the past. Consider, for instance, that Amazon had $114.23 billion in cash, equivalents, and marketable securities as of the end of the third quarter. This grants the company significant financial flexibility. Second, Amazon is a leader in some industries, such as cloud computing and artificial intelligence (AI), with massive long-term opportunities. It could tap into these markets for years after interest rates have risen and fallen. I am staying put.
3. Walmart
The retail landscape could experience lower demand in a high-interest rate environment. At first glance, that could mean trouble for Walmart, but there is more to the story. The Federal Reserve's efforts to combat inflation may push consumers even more toward companies that offer them the most bang for their buck. In the retail industry, few can beat Walmart at this game. One of the company's most important strategic advantages is its EDLP (Every Day Low Price) strategy.
WMT - Walmart
NASDAQ · As of 1:22 PM ET 11/06/26
Key data points
Walmart's ability to offer competitive prices could help it withstand a higher-rate environment and perform relatively well, especially compared to most of its retail peers. The company also boasts attractive long-term prospects. Its e-commerce and advertising businesses have performed well and should help increase margins over the long run. Finally, Walmart is also a Dividend King, having raised its payouts for 53 consecutive years. It is a top pick for long-term income seekers.
4. Berkshire Hathaway
Berkshire Hathaway has several strengths that could keep it relatively insulated from the negative impact of higher interest rates. First, its operations are fairly diversified and include some businesses that tend to perform particularly well when interest rates rise. Consider the company's insurance operations, which are its single largest source of revenue. Insurance companies make money by investing insurance premiums in fixed-income assets, including bonds. Higher interest rates mean higher yields on newly purchased bonds.
BRKB - Berkshire Hathaway
NYSE · As of 1:22 PM ET 11/06/26
Key data points
Second, Berkshire Hathaway is sitting on a ton of cash and other highly liquid assets. The company ended the second quarter with $365.5 billion in cash, equivalents, and Treasury bills. In a higher-interest rate environment, Berkshire Hathaway can invest its maturing Treasury bills at higher yields.
The company's massive liquid assets also give it the flexibility to invest in stocks on dips in case challenging macroeconomic conditions trigger a sell-off. Berkshire has gone through significant changes in recent years. Most notably, Warren Buffett is no longer its CEO. But the underlying business remains solid, and the culture hasn't changed. That makes Berkshire a great stock to hold onto.