Editor’s Note: In today’s issue, Robert Rapier examines CME Group — one of the few businesses that earns more when investors get nervous. For readers looking for positions that generate safety, income, and real growth without depending on market volatility to deliver, Robert’s Utility Forecaster portfolios are built around exactly that combination — essential-service companies with mandated demand and growing dividends. See his current recommendations →

Markets have had no shortage of things to worry about lately. Oil prices have surged on renewed fighting with Iran, Treasury yields have been bouncing around as investors debate the Federal Reserve’s next move, and stocks have been responding sharply to every new economic report. Even gold, traditionally viewed as a safe haven, has seen large daily swings.

For many companies, that kind of uncertainty is a problem. But for CME Group (NSDQ: CME), it can be very good for business.

CME operates some of the world’s largest futures and options exchanges. Investors use its markets to hedge or speculate on interest rates, stock indexes, currencies, energy, agricultural commodities, metals, and cryptocurrencies. When uncertainty rises, companies and investors generally have a greater need to manage risk. That tends to translate into more trading volume for CME.

Volatility Is the Product

Most businesses want stability. CME is somewhat unusual because instability can actually increase demand for what it sells.

Take interest rates. The August employment report showed that the U.S. economy added 162,000 jobs, far more than economists expected. That immediately increased expectations that the Federal Reserve could raise interest rates at its September meeting. Treasury yields moved higher, and traders quickly adjusted their positions in futures and options tied to interest rates.

CME sits in the middle of that activity. Its interest-rate products include futures and options on Treasury securities and short-term interest rates, giving banks, asset managers, corporations, and traders a way to hedge changing borrowing costs and bond prices.

The same principle applies to energy. Crude oil has moved sharply as the conflict with Iran has disrupted global supply flows. Producers, refiners, airlines, and other companies exposed to energy prices can use CME’s contracts to reduce that risk. Oil traders, of course, are active there as well.

CME does not need to predict whether oil goes to $120 or falls back to $70. It benefits when participants have a reason to trade.

The Numbers Show It

That dynamic has been visible throughout 2026. CME reported second-quarter revenue of $1.7 billion and operating income of $1.1 billion. Adjusted earnings were $2.99 per share. Management described the first half of 2026 as the strongest in company history, with record first-half revenue, adjusted operating income, adjusted net income, and adjusted earnings per share.

Trading activity has remained strong since then. In August, CME reported average daily volume of 29.7 million contracts, the second-highest August in company history and 6% above the year-ago level. Interest-rate contracts accounted for 16.7 million contracts per day, while metals volume increased 48% from the previous August. U.S. Treasury trading volume rose 15%.

That diversification is important. CME is not dependent on one particular market remaining volatile. If interest rates quiet down, energy or equities may become active. If crude oil stabilizes, currency or metals trading may pick up. The company benefits from providing the infrastructure investors use to manage risk across many different asset classes.

There Is Income Here Too

CME is also unusual among financial companies because of the way it returns capital to shareholders. The company currently pays a regular quarterly dividend of $1.30 per share. But it also distributes excess cash through an annual variable dividend. Earlier this year, CME declared a $6.15-per-share variable dividend based on its 2025 results. Combined with the regular quarterly payments, the company said its 2025 distributions represented a 4.2% yield based on the average share price during that year.

That variable component means the dividend can fluctuate, so investors should not treat the entire payout as guaranteed annual income. But it provides an additional way for shareholders to participate when CME generates excess cash.

Not Exactly a Bargain

There is one reason I would not describe CME as a screaming bargain. At about $281 per share, the stock trades at roughly 24 times trailing earnings and about 23 times forward earnings. That is not cheap, particularly with analysts generally viewing the shares as fairly valued at current levels.

There is also an unusual risk to the thesis. If markets become unusually calm, trading volume can fall. Lower volatility across interest rates, equities, energy, and commodities would reduce some of the urgency that drives investors toward CME’s products.

But that is not the environment we have today.

We have an uncertain Federal Reserve decision approaching, elevated Treasury yields, an unresolved conflict affecting global oil supplies, volatile commodity markets, and equity indexes near record levels. Each new economic report seems capable of moving multiple markets at once.

For most companies, that creates headaches. For CME Group, it creates customers. That is why CME is one stock I would keep on my watch list as volatility remains elevated.

CME is an unusual company — it genuinely earns more when markets are unsettled, which makes it a kind of inverse hedge against calm conditions. The positions I hold in my Utility Forecaster portfolios work from a different premise: essential-service companies that keep paying you and growing regardless of whether the Federal Reserve raises rates, oil supply is disrupted, or Treasury yields move sharply. The Income Portfolio delivered 10.7% total return and a 4.8% yield in 2025 — with a 0.41 beta that stayed well below the broader market throughout. If you’d like to see what I’m currently recommending, here’s a look at the full portfolio and the thesis behind each position →