Inflation Could Be Coming Back. 2 Stocks To Buy Now

Key Points
Producer prices rose 0.7% from the previous month in February.
Inflation could soar in response to higher oil and fertilizer prices from the war in Iran.
AutoZone and Dollar General are two inflation-proof stocks worth considering.
- 10 stocks we like better than AutoZone ›
As anybody who's driven down a road in the past couple of weeks knows, gas prices have spiked, jumping by roughly 27% since the war in Iran started.
That's prompted fears of widespread inflation as oil is an input in a wide range of products, and higher fuel prices lead to higher costs for transportation, which includes shipping for retail and industrial products.
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On Wednesday, investors got more bad news on the inflation front as the producer price index (PPI), or a measure of wholesale prices, came in much hotter than expected. Monthly prices rose 0.7% in February, well ahead of estimates at 0.3%. That followed a 0.5% increase in January and a 0.4% increase in Dec. 2025. On an annual basis, wholesale prices rose 3.4% in February.
Core prices, which exclude more volatile categories like food, energy, and trade services, were up 3.5%. Wholesale prices tend to be a leading indicator for retail prices, so the higher inflation at the producer level likely portends higher prices for consumers.
Stocks fell modestly on the news on Wednesday, but inflation seems likely to get worse as the February data doesn't take into account the spike in oil prices in March. Additionally, fertilizer prices have also soared due to the war, which is likely to drive food prices higher.
At times like these, it makes sense to consider putting some inflation-proof stocks in your portfolio. Keep reading to see two that look attractive.
1. AutoZone
Very few stocks are countercyclical, meaning they perform better at the bottom of the economic cycle than they do at the top. AutoZone (NYSE: AZO) is one of them.
Like other aftermarket auto parts retailers, AutoZone benefits from consumers delaying new car purchases, which is common during inflationary or recessionary environments. Typically, the company sees its strongest growth in comparable sales during the tail end of recessions, or when consumers have the least discretionary income available. Most purchases at AutoZone aren't discretionary. Americans need a functioning vehicle, and if they can't afford a new one, the other option is to keep their existing one on the road, so they or their mechanic must make repairs and buy replacement parts at AutoZone or a competitor.
Over its history, AutoZone has also proven to be one of the best operators in its industry, along with O'Reilly Automotive, in its industry. Over the last decade, the stock is up more than 300% over the last decade, and it's gained more than 10,000% since its IPO in 1991. AutoZone hasn't necessarily been a high-growth stock for most of its history, but it's rewarded investors through steady share buybacks, which have reduced shares outstanding by nearly 50% over the last decade.
AutoZone is coming off a solid quarter with 3.3% comparable sales growth. If inflation becomes a concern, the auto parts retailer should deliver strong returns for investors.
2. Dollar General
In tough times, consumers tend to trade down to cheaper stores and products, and few other retailers benefit from that behavior more than Dollar General (NYSE: DG), the nation's biggest retailer by number of stores, with more than 20,000 locations across the U.S.
Dollar General was already seeing some of that behavior last year as a weakening labor market and new tariffs pressured consumer spending, driving the stock up 75% last year, and that movement could accelerate in 2026 if inflation rises.
The company is coming off a strong 2025 as its turnaround efforts, which include improvements to distribution and store-level issues like out-of-stocks and slow checkouts, are paying off. Comparable sales rose 3% and accelerated over the course of the year, while margins improved as inventories fell 7%, allowing the company to avoid markdowns.
Investors were disappointed with 2026 guidance, which calls for comparable sales growth of 2.2%-2.7%, but that may reflect some conservatism at the beginning of the year. Dollar General also continues to open new stores with 460 planned for 2026, as well as more than 2,000 remodels.
Based on guidance, the stock trades at a forward P/E of less than 18. If inflation returns, the discount retailer looks poised for another strong year.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.