Amid escalating trade tensions, investors are increasingly turning to defensive stocks, which are known for their stable earnings and dividends. This shift in strategy is reminiscent of previous trade conflicts, where defensive stocks outperformed the broader market. Over the past three weeks, defensive companies within the S&P 500 have gained approximately 2.4%, while cyclical stocks have declined by 1.2%. This trend highlights the market's preference for stability amidst economic uncertainty, driven by tariff-related headlines. Julian Emanuel of Evercore ISI suggests focusing on "trade-war heroes" like H&R Block, Cigna, and Apple, which are perceived as safer bets due to their low volatility and high buybacks.
The MAX S&P 500 4X Leveraged ETN (SPYU) experienced a slight decline, dropping 0.56% to $49.73 at 11:20 AM on Wednesday, February 5.