The consistent outperformance of low-volatility stocks in times of uncertainty highlights their appeal to investors seeking stability and security amidst turbulent economic conditions. As trade tensions continue to impact market sentiment, these stocks are likely to remain an attractive choice for risk-averse investors looking to weather the storm.
Amidst the escalating trade tensions and the emergence of a global trade war, low-volatility stocks are gaining attention as potential winners. Evercore ISI's analysis suggests that stocks like Apple and AbbVie could be well-positioned to thrive in this environment. The recent implementation of tariffs by President Donald Trump on key trade partners has led to retaliatory measures, causing concerns about economic stagnation and impacting major indices such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average.
Historically, low-volatility stocks have outperformed during periods of trade tensions and uncertainty, with Evercore highlighting their defensive nature as a key advantage. Senior managing director Julian Emanuel emphasizes the importance of defense in the current market landscape, noting that low-volatility stocks are expected to lead defensive factor performance in the coming weeks and months.
Market Reaction to Trade War
The S & P 500, Nasdaq Composite, and Dow Jones Industrial Average have all experienced a 2% decline week to date following the implementation of President Trump's tariffs on Canada and Mexico.
Among the "trade war heroes" identified by Evercore are several health-care giants, including AbbVie, Centene, Humana, DaVita, and UnitedHealth Group. Health-care stocks are traditionally seen as a defensive hedge in investment portfolios due to their resilience during economic slowdowns. In 2025, the health-care sector has shown strength, with AbbVie notably up 17% year to date following strong quarterly results and expansion into new markets such as obesity treatment.
Performance of Low-Volatility Stocks
Evercore's analysis reveals that low-volatility stocks outperformed during the February trading period characterized by trade war signals and market uncertainty.
Apple, despite a 4.7% decline in shares this year, is also highlighted as a strong defensive pick. Analysts believe that the tech giant's focus on artificial intelligence and potential for a new iPhone upgrade cycle positions it well in the current market conditions.
Trade War Heroes Identified
Senior managing director Julian Emanuel highlighted a group of "trade war heroes" among Russell 3000 stocks known for their low volatility and buybacks.
Additionally, defense stocks like Booz Allen Hamilton and Lockheed Martin are seen as safe havens amidst market volatility. While both companies have faced declines in 2025 amid concerns over defense spending cuts, their reliance on government budgets and war-related activities makes them less sensitive to broader market fluctuations.
Health-Care Stocks as Defensive Picks
Companies like AbbVie, Centene, Humana, DaVita, and UnitedHealth Group are expected to perform well during the trade war, given the defensive nature of health-care stocks in investment portfolios.
Overall, as the trade war unfolds and market uncertainty persists, investors are looking towards low-volatility and defensive stocks like Apple, AbbVie, and select defense companies for stability and potential gains in the midst of economic turbulence. Amid escalating trade tensions and the emergence of a global trade war, low-volatility stocks like Apple and AbbVie are poised to shine, according to Evercore ISI.
AbbVie's Strong Performance
AbbVie, in particular, has demonstrated a robust performance in 2025, with a 17% increase driven by strong quarterly results and expansion into the obesity market.
DaVita's Potential Breakout
Although DaVita's shares have seen a slight decline this year, the kidney health company could be on the verge of a significant breakthrough, according to recent chart analysis.
Apple: A Defensive Tech Pick
Apple is identified as a solid defensive pick, despite a 4.7% drop in shares this year, attributed to its safe-haven status and potential for a new iPhone upgrade cycle driven by artificial intelligence.
Defense Stocks for Investor Safety
Booz Allen Hamilton and Lockheed Martin are highlighted as defense stocks that offer investors a level of safety during the trade war, given their independence from broader market performance and reliance on government budgets.
