We just published a list of 10 Best Stocks to Buy for a Rising Interest Rate Environment, and PNC Financial Services Group Inc. (NYSE:PNC) ranked 7th on this list.
After a prolonged run of easing speculation, the interest rate outlook has taken a shift. Back in September, the Federal Reserve increased rates by 25 basis points, and economists are now anticipating another rate hike in December, according to a recent Reuters poll. Bond markets have already reacted to yield curve changes, as the 10-year Treasury yield jumped from 3.97% in February 2026 to 5.31% during the first week of October. It came down to 4.98% by the end of October. Fed’s preferred inflation metric, Core PCE, went up by 0.3% during September to its highest reading in a year. Do check Insider Monkey’s list of 10 Stocks Analysts Just Downgraded.
Market participants see this as an uncomfortable mix. Elevated interest rates increase the discount rate on projected earnings, which adversely affects the richly valued growth names. They also take a toll on highly leveraged businesses and make bond-like stocks such as utilities and REITs appear less attractive. We recently provided an expanded list of 10 Buy the Dip Stocks Insiders Are Loading Up On After the Recent Market Sell-Off.
But tightening cycles do not necessarily bring bad news for all businesses. Some segments benefit as rates climb, while others carry strong pricing power and balance sheet strength to navigate through them. Hence, several names are likely to benefit from further monetary tightening by the U.S. Federal Reserve, and PNC Financial Services Group is one of them. The stock was held by 59 hedge funds as of the Q2 2026 closing, as per the Insider Monkey database.
PNC Financial Services Group Inc. (NYSE:PNC) primarily benefits from rising interest rates by locking in higher asset yields on its commercial lending products and variable-rate loans. PNC delivered an impressive loan book expansion and net interest income growth during Q3 fiscal 2026, and the stock’s current valuation appears compelling.
With a market capitalization of nearly $92 billion, it trades at a modest trailing earnings multiple of 12.3x, below the 5-year median of 12.8x. Moreover, its forward price-to-earnings multiple of 10.7x indicates an earnings yield of around 9.4%. Management has acknowledged that a steeper yield curve favors the company, as it increases the spread between the longer-term asset returns and short-term funding costs. This boosts profitability for the business across later cycles.