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Navigating Market Turmoil: Stocks That Are Rising Amid the Tariff-Induced Sell-Off

Global stock markets have plunged into extreme volatility following fresh tariff announcements, leaving investors scrambling for safe havens. While the broader market has suffered steep losses, certain stocks have bucked the trend, posting gains even in this turbulent environment. Should investors sell at a loss, double down with leverage, or focus on diversification? Let’s break it all down with the latest data as of April 4, 2025.

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1. Market Mayhem: How Bad Is It?

The tariff dispute between major economies—most notably the U.S. and China—has reignited concerns over supply chain disruptions, inflation, and slower global growth. Equity markets have responded sharply, with all major indexes in correction or bear market territory.

Major Index Performance (YTD as of April 4, 2025):

• S&P 500: Down approximately 13.7% YTD.
• Dow Jones Industrial Average: Declined by about 9.94% YTD.
• Nasdaq Composite: Experienced a decrease of roughly 19.28% YTD.
• TSX Composite (Canada): Down 8.2% YTD.

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‘Magnificent Seven’ Stocks YTD Performance (as of April 4, 2025):

• Apple (AAPL): Down 24.77% YTD.
• Microsoft (MSFT): Decreased by 14.63% YTD.
• Amazon (AMZN): Fell 22.00% YTD.
• Meta Platforms (META): Fell by 13.80% YTD.
• Tesla (TSLA): Experienced a significant drop of 40.0% YTD.
• NVIDIA (NVDA): Faced a decline of 29.00% YTD.
• Alphabet (GOOGL): Down 22.42% YTD.

Clearly, tech-heavy indexes are underperforming the broader market, with the Nasdaq taking the hardest hit.

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2. Stocks That Are Rising Against the Trend

Amid the sell-off, defensive sectors—consumer staples, discount retailers, and healthcare—have shown resilience. Let’s look at some of the top-performing stocks:

a) Consumer Staples: Procter & Gamble (PG) and Coca-Cola (KO)

PG stock has risen 4% in the past two weeks, as demand for everyday essentials remains steady. KO shares are up 3.2%, as investors shift towards companies that produce necessary goods, unaffected by tariff concerns.

b) Discount Retailers: TJX Companies (TJX)

TJX, the parent company of TJ Maxx and Marshalls, has gained 5%, capitalizing on supply chain disruptions. Retailers facing excess inventory are offloading products to discount chains, boosting TJX’s margins.

c) Healthcare: Johnson & Johnson (JNJ) and Molina Healthcare (MOH)

JNJ stock has climbed 2.5%, as the pharmaceutical giant remains insulated from trade disputes. MOH shares are up nearly 6%, benefiting from strong earnings and demand for managed healthcare services.

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3. Do These Stocks Offer Dividends? Are They Sustainable?

One of the key advantages of investing in these defensive stocks is their ability to generate consistent dividends, even during economic uncertainty.

Dividend History (Past 10 Years):

• Procter & Gamble (PG):
  • Dividend Yield: 2.4%
  • Dividend Growth Streak: 67 years
  • Payout Ratio: 61%
• Coca-Cola (KO):
  • Dividend Yield: 3.1%
  • Dividend Growth Streak: 61 years
  • Payout Ratio: 75%
• Johnson & Johnson (JNJ):
  • Dividend Yield: 2.9%
  • Dividend Growth Streak: 61 years
  • Payout Ratio: 50%
• TJX Companies (TJX):
  • Dividend Yield: 1.6%
  • Dividend Growth Streak: 27 years
  • Payout Ratio: 33%

PG, KO, and JNJ are dividend aristocrats, meaning they have increased dividends for 25+ consecutive years, proving their resilience through past recessions. TJX’s dividend yield is lower, but it has strong growth potential due to its robust business model.

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4. Is It Time to Shift Strategy? Selling at a Loss vs. Leveraged Buying

With markets in turmoil, investors must decide:

• Lock in losses by selling?
• Take advantage of market swings through leverage?

a) Should You Sell?

Selling in panic can be dangerous. Market downturns are often temporary, and historical data suggests that markets recover over time. If you own high-quality companies with strong fundamentals, selling at a loss may not be the best move.

b) Should You Use Leverage?

Using margin or leverage to buy undervalued stocks can be tempting, but it also comes with high risks. If the market falls further, leveraged losses can be devastating. However, if used cautiously, borrowing to invest in dividend-paying defensive stocks can enhance returns over time.

Leverage Example:

Suppose you buy $10,000 worth of JNJ stock on margin at a 3% interest rate. JNJ’s 2.9% dividend yield nearly offsets the borrowing cost. If the stock appreciates 5-7% over the next year, the returns could exceed the borrowing cost. But if JNJ declines, losses will be magnified.

For risk-averse investors, sticking to long-term, fundamentally strong stocks without leverage is often the safest approach.

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5. Why Diversification Matters for DIY Index Investors

For passive investors following index funds, the recent market sell-off highlights the importance of diversification. Instead of focusing on a handful of stocks, a well-balanced portfolio can smooth out volatility.

a) Benefits of Diversification:

• Reduces risk by spreading investments across sectors.
• Balances growth and stability with a mix of defensive and high-growth stocks.
• Avoids over-reliance on a single industry or economic trend.

b) Index Funds as a Solution:

DIY investors who want broad market exposure can rely on index funds such as:

• Vanguard S&P 500 ETF (VOO): Tracks the S&P 500, providing exposure to all major sectors.
• iShares MSCI World ETF (URTH): A global index fund, spreading risk across countries.
• Vanguard Consumer Staples ETF (VDC): Focuses on defensive stocks that tend to perform well in downturns.

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Final Thoughts: Weathering the Storm

The current market volatility, driven by tariff concerns, has created both risks and opportunities. While high-growth stocks are suffering, defensive sectors like consumer staples, healthcare, and discount retailers have emerged as safe havens.

For investors, the key takeaways are:

• Panic selling can lead to permanent losses.
• Holding high-quality stocks may be the best approach.
• Defensive dividend stocks provide stability and income, making them attractive during uncertainty.
• Leverage can boost gains but also magnify risks. It should be used cautiously.
• Diversified portfolios are crucial, especially for DIY investors. Index funds help balance risk and reward.

Rather than reacting emotionally, investors should stay focused on long-term goals, rebalance portfolios wisely, and capitalize on opportunities where possible.

Would you shift your strategy in this downturn, or are you staying the course? Let me know your thoughts in the comments!

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Disclaimer: This blog article is for informational purposes only and should not be considered financial advice. Everyone’s financial situation is unique. Always consult with a qualified financial advisor or planner to assess your individual circumstances before making financial decisions