U.S. stocks took a beating on Sep 26, with the S&P 500 and the Dow sliding into a bear market. The broader S&P 500 has now tanked more than 20% from its Jan 3 record high. Similarly, the 30-stock Dow is down nearly 20.4% from its Jan 4 record.

The last time the blue-chip index slipped into the bear market was in early 2020 when the outburst of the coronavirus pandemic sparked a downturn in economic growth.

Sell-off on Wall Street has been broad-based, with multinational companies leading the pack. This is because a stronger U.S. dollar, at present, is now widely expected to impede their earnings growth. And why not? These companies derive a bulk of their earnings from overseas, which will now get exposed to foreign exchange risks in the United States and various other countries they are functioning in. Hence, a strengthening dollar will dent foreign sales of such multinational companies.

The U.S. dollar, by the way, soared to a new 20-year high against its major peers, with the British pound touching a fresh record low against the greenback on Sep 26. The euro, too, touched its lowest level versus the dollar since 2002.

In fact, a hawkish Fed has helped the spike in the dollar index. The central bank has now pledged to continue its aggressive tightening measures to tame a stubborn increase in inflation. The Fed has already increased its federal funds rate to its highest level since early 2008.

Nonetheless, such a continuous rise in interest rates eventually increases the value of a country’s currency. After all, higher interest rates draw foreign investments, thereby increasing the demand for the home currency, which explains why the dollar is strengthening amongst Fed rate hikes.

But purely from an investment perspective, even though a stronger dollar doesn’t bode well for multinational companies, it certainly acts as a boon for domestic players. This is because these companies generate the lion’s share of their revenues from within the country, which insulates them from the impact of a stronger dollar.

Therefore, it is judicious to invest in stocks like Consolidated Water Co. Ltd. CWCO, Ashford Hospitality Trust, Inc. AHT, BankFinancial Corporation BFIN, LogicBio Therapeutics, Inc. LOGC and ProPhase Labs, Inc. PRPH that have high domestic exposure in terms of revenue generation. They also boast a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Consolidated Water designs, constructs, manages and operates water production and water treatment plants primarily in the United States. Consolidated Water has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up almost 9% over the past 60 days. The company’s expected earnings growth rate for the current year is 217.4%.