In recent weeks, the world’s financial markets have been rattled by the new wave of trade tensions that have escalated into a full-blown trade war. The imposition of tariffs by President Donald Trump against key partners, including Canada and Mexico, signals a troubling chapter in international commerce. The immediate backlash has seen major indexes like the S&P 500 and the Dow Jones Industrial Average plunge nearly 2%, reflecting investor anxiety about potential economic stagnation. In these turbulent times, a keen focus on low volatility stocks has emerged as a beacon of hope for risk-averse investors. According to insights from Evercore ISI, these stocks could not only weather the storm but stand out as true winners.
Historically, low volatility stocks have risen to the occasion during uncertain times. Evercore ISI’s analysis reveals that these defensive plays outperformed the market during past episodes of trade turmoil, particularly during Trump’s earlier trade disputes. Their promise lies in the fact that they tend to be more immune to the swings of broader market sentiment—a vital quality when fear permeates trading floors. A notable observation by Senior Managing Director Julian Emanuel emphasizes that “defense remains the best offense” in such a climate. This perspective encourages investors to build resilience into their portfolios as trade uncertainties unfold.
Among the candidates for this defensive investment strategy, healthcare stocks have emerged as particularly promising. Companies such as AbbVie, Humana, and UnitedHealth Group have shown remarkable stability and growth potential, performing well despite the ongoing challenges posed by tariffs and market volatility. The healthcare sector has consistently proven to be a sanctuary for investors during downturns, making it an essential component of a balanced investment stance in times of crisis.
2025 has shown remarkable performance for healthcare stocks, with AbbVie demonstrating a staggering 17% year-to-date growth. This impressive gain comes on the back of strong quarterly results that exceeded Wall Street expectations, positioning AbbVie favorably in the burgeoning obesity market. On the other hand, DaVita’s share performance has been less stellar, down nearly 4%; however, the company is seen as a potential turnaround story, with analysts predicting better long-term prospects against the backdrop of market volatility.
The tech sector is not to be overlooked in this discussion. Apple, despite facing a 4.7% decline this year, has been heralded as a ‘safe haven’ among the elite “Magnificent Seven” technology stocks. Analysts suggest that its ongoing innovations, particularly in artificial intelligence, may rejuvenate its product cycles and, in turn, investor sentiments. Apple’s iconic status and consumer loyalty bolster its resilience, making it an attractive option for those looking for stability amidst rising tensions.
The defense sector remains another compelling area of interest for investors seeking refuge amidst the chaos. Although firms like Booz Allen Hamilton and Lockheed Martin have faced share price declines of 16% and over 6% respectively in 2025, their inherent characteristics provide a compelling narrative. With defense contracts generally insulated from fluctuations in the broader economy due to their dependence on government budgets, these companies are positioned to thrive as long as geopolitical uncertainties persist. Their unique business models provide stability, making them standout investments during times of trade war inflation.
For many, trade wars represent an inherent volatility in the market, yet low volatility stocks are not merely surviving—they are thriving. As evidenced by analysts’ recommendations, the notion that “defense is the best offense” rings particularly true in volatile climates. While market speculation and investor fears may rattle the confidence of many, embracing a defensive posture with low volatility stocks provides a solid strategy to navigate the uncertain waters of global trade.
In essence, the opportunities present in low volatility stocks could mean the difference between financial stability and distress during turbulent times. It is this understanding that separates fear-based investment decisions from strategic, well-informed positioning in the market. As the trade war progresses, these defensive stocks are likely to come under the spotlight, solidifying their place as essential players for savvy investors.