Where to invest $10,000 right now in a market rattled by higher interest rates

Investing ideas: Utility stocks, industrials, defense, financials

Interest rates look poised to remain structurally higher, but US stocks seem resilient for now, Gupta told BI. She pointed to how the recent rise in yields has been spread out over weeks, and the broader move up has taken place over the course of this year, giving investors time to adjust.

Gupta said that the AI trade likely has more room to climb, especially considering how stock valuations have compressed recently amid the bond sell-off. Her allocation view is to be overweight US stocks over bonds.

In equities, she sees opportunities in four sectors: (1) utilities, a defensive play, (2) industrials, linked to the AI buildout, (3), defense, because of US government investment, and (4) financials, because higher rates will juice their interest income.

Funds that track these sectors include the Vanguard Utilities ETF, the State Street Industrial Select Sector SPDR ETF, the iShares US Aerospace & Defense ETF, and the iShares US Financials ETF.