Inflation unexpectedly declined in March for the first time in nearly five years, the Commerce Department said on Thursday. The fresh inflation report came a day after President Donald Trump temporarily halted his tariffs on most countries, sending Wall Street on a historic rally.

Although the halt is temporary, as the White House continues negotiations with the trading partners of the United States, investor sentiment has got a much-needed boost over the past couple of seasons.

Given the positive sentiment, investing in consumer discretionary stocks would be a prudent choice. Four such stocks are American Outdoor Brands, Inc. AOUT, Carnival Corporation & plc CCL, GameStop Corp. GME and Netflix, Inc. NFLX.

Each of these stocks has seen positive earnings estimate revision in the past 60 days and carries a Zacks Rank #1 (Strong Buy) and 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inflation Declines for First Time in Years

The Commerce Department said that the consumer price index (CPI) declined 0.1% sequentially in March after increasing 0.2% in February and surpassing the consensus estimate of a rise of 0.2%. This was the first time the CPI declined since May 2020.

Year over year, CPI rose 2.4% in March after climbing 2.8% in the month earlier. Core CPI, which strips out the volatile energy and food components, rose 0.1% sequentially in March after advancing 0.2% in February, the smallest rise since June 2024.

The drop in March can be attributed to cheaper fuel and motor vehicles. Gasoline prices declined 6.3%. However, food prices rose 0.45 in March after climbing 0.3% in February. Prices of eggs, meat and fish increased, but fruits and vegetables declined.

Trump Pauses Tariffs

Wall Street rallied on Wednesday, with all three major indexes hitting record single-day gains after Trump announced a 90-day pause on tariffs. Trump’s announcement came less than 24 hours after his sweeping tariffs targeting all the countries trading with the United States went into effect.

Earlier, markets lost $6.4 trillion in four trading sessions after Trump slapped tariffs on trading partners of the United States. Although the pause is temporary, the announcement came as a major relief to investors.

Also, the White House said that the Trump administration has started trade talks after more than 50 countries approached to negotiate. This could ease the trade war over the coming days, which could boost the markets.

Also, if inflation continues to show signs of cooling, the Federal Reserve is expected to resume its rate cuts in the coming months, which will benefit the broader market.

Story Continues

4 Discretionary Stocks With Upside

American Outdoor Brands

American Outdoor Brands, Inc. is a provider of outdoor products and accessories, including hunting, fishing, camping, shooting and personal security and defense products, for rugged outdoor enthusiasts. AOUT produces products under the brands Caldwell, Crimson Trace, Wheeler, Tipton, Frankford Arsenal, Lockdown, BOG, Hooyman, Smith & Wesson Accessories, M&P Accessories, Thompson/Center Arms Accessories, Performance Center Accessories, Schrade, Old Timer, Uncle Henry, Imperial, BUBBA, UST, LaserLyte and MEAT!.

American Outdoor Brands’ expected earnings growth rate for the current year is 93.8%. The Zacks Consensus Estimate for current-year earnings has improved 10.7% over the past 60 days. AOUT currently has a Zacks Rank #2.

Carnival Corporation & plc

Carnival Corporation & plc operates as a cruise and vacation company. As a single economic entity, CCL forms the largest cruise operator in the world. Carnival Corporation & plcis the world’s leading leisure travel firm and carries nearly half of the global cruise guests.

Carnival Corporation’s expected earnings growth rate for the current year is 31%. The Zacks Consensus Estimate for current-year earnings improved 5.1% over the last 60 days. CCL currently carries a Zacks Rank #2.

GameStop Corp.

GameStop Corp. is the world's largest video game retailer. GME offers the best selection of new and pre-owned video gaming consoles, accessories and video game titles, in both physical and digital formats. GameStopalso publishes Game Informer, the world’s largest print and digital video game publication, featuring reviews of new title releases, game tips and news regarding current developments in the video game industry.

GameStop’s expected earnings growth rate for next year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. GME currently sports a Zacks Rank #1.

Netflix, Inc.

Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.

Netflix’s expected earnings growth rate for the current year is 24.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. NFLX currently carries a Zacks Rank #2.

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