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President Donald Trump’s tariff policies have added fuel to the already volatile markets that had been reeling under fears of a recession as high inflation continues to rattle the economy. Uncertainty over the economy’s future owing to the ongoing global factors could keep markets volatile for a longer period.
Given this uncertainty, cautious investors looking for a steady income and ways to protect their capital may want to hold or buy dividend-paying stocks. Three such stocks are Toll Brothers, Inc. TOL, Chord Energy Corporation CHRD and Korn Ferry KFY.
Trump’s Tariffs, Inflation Rattling Stocks
High inflation has unsettled markets over the past couple of months. On Wednesday, fresh data showed that inflation somewhat eased in February after rising in the prior three months. The Commerce Department said that the consumer price index (CPI) increased by 0.2% month over month in February, lower than expectations of a rise of 0.3%. On a year-over-year basis, CPI grew 2.8%, also below analysts’ projections of 2.9%.
However, price pressure continues to strain consumers, as inflation remains well above the Federal Reserve’s 2% target. Persistently high inflation led the Federal Reserve to pause rate cuts in its January meeting, following a total reduction of 100 basis points between September and December 2024.
Given that inflation remains stubbornly high, the Fed is unlikely to cut interest rates in its upcoming March meeting. Market participants now expect the Fed to keep interest rates unchanged till the second half of the year.
Also, concerns over the economy’s stability have intensified in recent weeks, as investors worry that Trump’s tariff policies could ignite a global trade war, potentially pushing the economy into a recession. Trump has already implemented a 25% tariff on various imports from Canada and Mexico, along with a 10% tariff on Chinese goods. He also signaled plans to impose tariffs on the European Union.
His tariff measures have heightened market instability, leading to stock market fluctuations. This volatility is expected to continue until investors gain more clarity on his trade policies.
3 Stocks That Recently Announced Dividend Hikes
Given the present circumstances, investing in stocks that pay dividends could be a smart choice. Such companies usually remain stable, consistently distributing dividends while sustaining profitability through strong business strategies. In a fluctuating market, companies that provide significant dividend payments often outperform those that do not.