2/5

VOO Flat Amid Shift to Defensive Stocks During Trade Tensions

Amid escalating trade tensions, investors are increasingly turning to defensive stocks, which are known for their stable earnings and dividends. This shift is reminiscent of strategies employed during previous trade conflicts, as economic uncertainty looms large. Defensive companies within the S&P 500 have outperformed their cyclical counterparts, gaining approximately 2.4% over the past three weeks. This trend highlights a growing preference for stocks that can weather trade-induced market volatility, with experts like Julian Emanuel of Evercore ISI recommending "trade-war heroes" such as H&R Block, Cigna, and Apple. These stocks are seen as safer bets due to their low volatility and high buybacks, making them attractive during periods of heightened economic uncertainty.

The Vanguard S&P 500 ETF (VOO) experienced a slight decline, dropping 0.22% to $552.13 as of 11:20 AM on Wednesday, February 5.