Inflation is rising at its fastest pace in 40 years, and Credit Suisse thinks these stocks will do well in this environment. The consumer price index — a widely followed measure of inflation — rose last month by 7% on a year-over-year basis. That's the measure's biggest surge since 1982. That spike has sent ripples across financial markets, putting pressure on the broader equity market. The S & P 500 is down more than 4% to start 2022, led by declines in the real estate, health care and tech sectors. Those moves come as the 10-year Treasury note yield has surged to its highest level in more than two years amid rising expectations of tighter Federal Reserve monetary policy. But, Credit Suisse thinks there are some stocks that could do well right now. The firm put out on Wednesday a list breaking down the S & P 500 stocks it sees as most sensitive to inflation. Among energy stocks, Credit Suisse highlighted Devon Energy and Diamondback Energy . Both stocks have been on a tear in the early part of the year, surging about 12% and 17%, respectively. Devon and Diamondback shares have also more than doubled in the past year. The firm also pointed to Freeport-McMoRan and Vulcan Materials as inflation-sensitive names in the materials sector. Freeport shares are up more than 7% year to date. Vulcan, meanwhile, is down more than 8% in 2022. In tech, chipmaker Micron Technology stands to benefit from this inflationary surge along with Hewlett Packard Enterprise , according to Credit Suisse. Micron is up more than 6% in the past 12 months, well below the S & P 500's 20% gain in that time, as supply chain issues have mired the industry during the Covid-19 pandemic. HPE, meanwhile, is up nearly 39% in the past year. Other stocks Credit Suisse thinks will do well amid rising inflation include Charles Schwab , Disney , utility FirstEnergy Corp and Zions Bancorp . —CNBC's Michael Bloom contributed to this report.
Traders work on the floor of the New York Stock Exchange (NYSE) on January 18, 2022 in New York City.
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Inflation is rising at its fastest pace in 40 years, and Credit Suisse thinks these stocks will do well in this environment.