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Defensive Sectors Gaining Favor
With tariff and recession risks looming, many investors are pivoting toward traditionally defensive sectors. Consumer staples, healthcare, and utilities—all sectors that tend to perform relatively well during economic stress—delivered strong returns in Q1 2025.
Healthcare led with a 6.1% gain, followed by consumer staples at 4.6%, and utilities at 4.1%, all outperforming the S&P 500’s 4.6% decline. These sectors typically benefit from steady demand, even during downturns, making them attractive shelters when uncertainty rises.
Is a “Trump Put” Supporting Markets?
Fundstrat’s Tom Lee believes the Trump administration is watching the markets closely, and that a significant downturn could prompt a softening of tariff policy.
He points to signs the White House wants a stock market rebound to validate its trade stance and to avoid a recession, which would likely demand costly fiscal intervention.
Still, relying on political motivations as a market backstop remains a risky strategy, especially for retail investors with less room for error.
Lack of Finality Fuels Ongoing Risk
Though many hoped April 2 would deliver clarity, analysts see no sign of a clean resolution. New measures, such as a 25% tariff on goods from countries buying Venezuelan oil, and pending auto-related duties, suggest an evolving and potentially expanding tariff regime.
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