Look at these stocks to help lead a comeback rally if inflation has peaked

Published Wed, Aug 10 202212:50 PM EDTUpdated Wed, Aug 10 20221:29 PM EDT

Stocks soared Wednesday after a better-than-expected slowdown in the pace of rising consumer prices. The consumer price index, which measures the price of a basket of goods and services, rose 8.5% in July from a year ago, as compared with estimates of an 8.7% increase. Investors cheered the news , which led many to wonder if inflation has peaked and if, in turn, the Federal Reserve may hike rates less aggressively. In both June and July, the central bank raised rates by 75 basis points each time to fight inflation. "The market seems to be taking comfort in the fact that we're seemingly past peak inflation, and we should continue to see declines in the second half of the year," said Brian Price, head of investment management at Commonwealth Financial Network. Others are less sure. Bankrate's chief financial analyst, Greg McBride, wrote in a note, "One in a row is not a streak — but it is a start." The following are some stocks that could benefit when rates stop rising and if the market keeps rallying. To find these "risk-on" names, CNBC Pro looked for names that are more volatile than the rest of the market (ie., have a high beta), and were hurt the most when inflation fears were at their height, dropping more than 20% in the first six months of this year. We also looked for companies where short interest — the percentage of shares freely available for trading that are sold short — topped 5%. All of the companies are in the S & P 500 index. Caesars Entertainment , almost 7% higher Wednesday, has the highest beta in our screen at 3.1, and 6.4% of its float is shorted. The casino company, which earlier this month reported a smaller-than-expected quarterly loss, plunged 59% the first six months of the year. Etsy saw the largest drop the first half of the year on the CNBC Pro screen, plummeting almost 67%. More recently, shares have been moving higher since Etsy earnings beat analyst estimates earlier this month. The online marketplace has a 2.3 beta and 11% of its shares in the open market are shorted. The stock was trading more than 6% higher on Wednesday. Bath & Body Works also saw its shares slump in the first half, falling 61%. It has a beta of 2.1 and 6.6% of its float is shorted. Last month, the retailer lowered its sales and earnings outlook due to the challenging macroeconomic environment. It was up 4% in trading Wednesday. To be sure, these stocks are risky. If the market rally fails, they could be hurt the most again on the downside. —CNBC's Fred Imbert contributed reporting.