What happened

Participating in a broad-based stock market rally that's already sent the S&P 500 soaring 1.6% (as of 1:20 p.m. EDT), shares of American Airlines Group (AAL -0.41%), General Motors (GM -0.24%), and Bed Bath & Beyond (BBBY) went off to the races this morning, with each stock up more than 5%.

American Airlines and General Motors stocks are holding onto these gains in midafternoon trading. Bed Bath and Beyond, in contrast, has given back more than half its gains and currently sits up just 1.8%.

Federal Reserve Building

Image source: Getty Images.

So what

What's all the fuss about? There are no obvious, specific catalysts driving the individual rallies at any of these companies. Rather, I think all of the rallies in each of these stocks can be traced back to a common cause: interest rates, and the fact that they might soon decline.

Yesterday, James Bullard, president of the Federal Reserve Bank of St. Louis, was quoted opining that with the economy starting to suffer from the effects of President Trump's ongoing trade war with China, cutting the Fed's targeted interest rate "may be warranted soon." Today, Federal Reserve Chair Jerome Powell seemed to second that emotion, promising the Fed will "act as appropriate" to keep the economy growing -- a statement investors are interpreting to mean that the Fed may cut interest rates.

Now what

Fine and dandy. Now what does all this mean for American Airlines, General Motors, and Bed Bath & Beyond in particular?

Well, if interest rates go down, then the cost of American Airlines servicing its $33.4 billion debt should go down as well. For a company carrying nearly three times its own market capitalization in debt, that's kind of a big deal.

Lower interest rates could also work to the benefit of General Motors; in addition to carrying a sizable debt load, GM is in the business of selling cars and trucks that people generally buy on credit -- paying interest to do so. The lower interest rates go, the cheaper GM's vehicles end up being for consumers, which could have a beneficial effect on both sales and earnings.

And Bed Bath & Beyond? That one's a little trickier. Bed Bath does have some debt -- about $500 million net of cash -- and lower interest rates on that can't hurt. Bed Bath also has a store-branded credit card (backed by Comenity Bank), and lower interest rates might encourage a little more consumer spending there as well. Still, the benefits to Bed Bath from lower interest rates aren't as clear-cut as those for American Airlines and for GM.

This, if you ask me, is why American and GM are holding onto more of their gains this afternoon, while Bed Bath stock is already starting to slip back.