With the Federal Reserve signaling a possible rate hike in September and inflation concerns staying in focus, large US financial stocks with solid balance sheets are back under the spotlight. Rising rates can reshape funding costs, loan demand, and investment returns across the sector, while AI spending, fiscal support, and the energy sector continue to influence overall market sentiment. Against this backdrop, this article highlights 3 stocks from a US Financial Sector Stocks screener that appear positively exposed to the latest news and may warrant a closer look for your own watchlist.

Lemonade (LMND)

Overview: Lemonade is a digital insurance company that sells renters, homeowners, auto, pet, life and landlord policies through an app based model, using automation and AI to handle everything from quotes to claims across the United States, parts of Europe, Louisiana, and the United Kingdom. It also acts as an agent for other insurers and covers both property and personal liability risks.

Operations: Lemonade generates about US$844.7m in revenue from property and casualty insurance, all from customers in the United States.

Market Cap: US$5.49b

Investors watching Lemonade are looking at a fast growing, AI driven insurer that is trying to use automation to keep fixed costs flat while in force premiums and revenue scale higher. This can be especially helpful when its float earns more in a higher rate setting. At the same time, the company is still loss making with a P/S multiple well above the broader insurance sector and relies entirely on external funding rather than customer deposits, which adds balance sheet risk. Recent moves to retain more reinsured premiums and expand renters and auto coverage, including partnerships in EV and autonomous car insurance, highlight how quickly the business model can shift. However, the path to durable profitability remains an open question.

Lemonade’s push to scale AI driven underwriting and claims while keeping fixed costs steady raises a bigger question: how does that balance against its rich P/S and reliance on external funding in the analysis report for Lemonade

Oscar Health (OSCR)

Overview: Oscar Health is a US based healthcare technology company that sells individual, family, and small group health plans while also licensing its +Oscar and Campaign Builder platforms to other insurers and providers. It combines health insurance, software tools, and a brokerage and enrollment marketplace so consumers and brokers can shop for and manage medical and supplemental coverage in one place.

Operations: Oscar Health generates about US$13.3b in insurance revenue from life and health coverage, all from customers in the United States.

Market Cap: US$9.7b

Oscar Health gives investors exposure to a tech focused insurer that is already handling US$13.3b of life and health premiums. The company’s use of AI and digital tools to cut administrative costs and manage care sits alongside sizeable capital reserves, but past losses, reliance on external funding, and dilution indicate this is still a higher risk story. Analysts are debating how durable its margins will be once risk pools and policy support shift. The key question is whether Oscar’s technology and pricing power can offset those pressures.

Oscar Health’s US$13.3b premium base and tech heavy model suggest the real story is how its margins could evolve once conditions shift, and the analyst forecasts for Oscar Health might show what expectations are quietly building.

First Merchants (FRME)

Overview: First Merchants is a regional US bank that offers everyday banking, mortgages, business lending, and wealth management services to consumers and companies across Indiana, Ohio, and Michigan through branches, online, and mobile channels.

Operations: First Merchants generates about US$637.8m in revenue from community banking activities in the United States.

Market Cap: US$2.74b

First Merchants gives you exposure to a regional bank that is closely tied to US interest rate moves, with earnings that are heavily influenced by changes in net interest margins as the Federal Reserve considers further hikes. The stock combines this rate sensitivity with a 3.31% dividend yield, high quality earnings, and experienced management, even though recent earnings growth turned negative and return on equity sits at 7.4%. A fresh US$100m buyback authorization and recognition on Forbes’ World’s Best Banks 2026 list add to the appeal, while insider selling, index removals, and softer recent share performance keep risk firmly on the table. The key consideration is how that mix of value, income, and rate exposure plays out next.

First Merchants’ mix of dividend income, buybacks, and rate sensitivity looks like a story the market has only half priced in, and the analysis report for First Merchants could reveal what those signals are quietly pointing to in the period ahead

The three US financial stocks covered here are only a starting point, and the full US Financial Sector Stocks screener surfaces 35 more companies with equally compelling balance sheet strength and rate sensitive narratives that have not been discussed yet. Use Simply Wall St to identify and analyze the specific catalysts, capital strength, and risk profiles that matter most to you so you can focus on the highest conviction ideas in this corner of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.