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The Trade: Stocks that rally on rising inflation

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

A key measure of U.S. inflation surprised to the upside Friday morning and possibly put additional Fed rate hikes this year back on the table. What should investors buy in periods of rising inflation?

The consumer price index excluding the food and energy components increased 0.3 percent in January versus the 0.2 percent consensus estimate, the biggest rise since August 2011. On a year-over-year basis, core CPI rose 2.2 percent, the highest level since June 2012.

"Higher prices on medical care, new and used cars, clothing and rent drove the beat," said Michael Block, chief strategist at Rhino Trading Partners, in an email. This report "actually gets the would-be hawks salivating about more 'gradual' rate hikes this year."

Utilizing Kensho, a quantitative tool used by hedge funds, CNBC Pro screened for the best-performing sectors and Dow Jones industrial average stocks during time periods since 1980 where core CPI was rising year over year.