According to Jefferies, a handful of stocks, including chip companies, will be winners as short-term interest rates slide due to the banking crisis. “If history is any guide, the recent financial turmoil will be enough to kill lending conditions as MM and credit spreads move. So the Fed will finally get what it wants – a soft recession/slowdown,” strategist Sean Darby said in a client note on Wednesday. in description. “For the first time since tightening began, the 2-year yield is below the fed funds target – we remain a long-term beneficiary of a downward shift in the yield curve,” Darby said. The strategist pointed out that the sharp decline in the 2-year Treasury yield is a sign that economic conditions are deteriorating. On Wednesday, the yield on the 2-year Treasury note was as low as 3.72%. That’s the lowest level since Sept. 13, 2022, when yields fell as low as 3.505%. Meanwhile, the yield on the benchmark 10-year Treasury note topped 3.388%. That was the lowest level since Feb. 3, when the 10-year yield fell as low as 3.365%. “Our measure of U.S. recession probability appears primed to rise exponentially — not much differently than other cycles,” Darby wrote. Still, there are some stocks that benefit from lower short- and long-term yields. In fact, the names Jefferies highlighted were mostly tech and growth stocks — the companies that suffer the most when rates rise and valuations fall sharply. If interest rates fall, they stand to profit. Jefferies named Tesla in its list. Shares of the electric automaker have plunged 65% in 2022 as the Federal Reserve embarks on its latest rate hike. A lower interest rate environment could boost shares, which are up about 44% in 2023. The firm has a Buy rating on Tesla. Semiconductor stocks Lam Research and Advanced Micro Devices also made the list. Shares of both companies slide in 2022, with Lam down about 41% and AMD down nearly 55%. Jefferies rates both stocks a Buy. Lam is up nearly 14% in 2023, while AMD is up 35%. Paycom Software and aerospace name TransDigm Group were also highlighted in the Jefferies report as beneficiaries of lower 2-year yields. Shares of both companies are rated Buy. Paycom is down 10% in 2023, while TransDigm is up more than 9%. – CNBC’s Michael Bloom contributed to this report.