Forget Tariffs, SPYD, XLP and XLU ETFs Are the Best Way to Play This Market

President Trump said tariffs on Mexico and Canada will go into effect on March 4. He added that tariffs on China will see a 10% hike then, too.

In addition, the President threatened to slap Europe with a 25% tariff.

“We’ll be announcing it very soon,” Trump said, as quoted by the BBC. “It’ll be 25% generally speaking and that will be on cars and all other things.” The European Union said it would react “firmly and immediately against unjustified tariffs”.

Key Points About This Article 

• President Trump just said tariffs on Mexico and Canada will go into effect on March 4. He added that tariffs on China will see a 10% hike then, too. In addition, the President threatened to slap Europe with a 25% tariff.
• With tariff fears comes fears of inflation and the likelihood the Federal Reserve won’t be able to cut interest rates aggressively in the near term.
• Investors may want to protect their portfolios with safe high-yielding stocks and ETFs, as well as safer consumer and utility ETFs.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Tariff Fears Are Weighing Heavily on Markets

All of which is weighing heavily on the broad market. That’s because with tariff fears come fears of inflation. With that, there’s also the likelihood that the Federal Reserve won’t be able to cut interest rates aggressively.

In a Truth Social post, he said, “Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by China. More than 100,000 people died last year due to the distribution of these dangerous and highly addictive POISONS. Millions of people have died over the last two decades.”

“The families of the victims are devastated and, in many instances, virtually destroyed. We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled. China will likewise be charged an additional 10% Tariff on that date. The April Second Reciprocal Tariff date will remain in full force and effect. Thank you for your attention to this matter.”

That being said, investors may want to protect their portfolios with safe ETFs, including dividend, consumer and utility ETFs, such as:

SPDR Portfolio S&P 500 High Dividend ETF  

With a yield of 4.43% and an expense ratio of just 0.07%, the SPDR Portfolio S&P 500 High Dividend ETF (NYSEARCA:SPYD) tracks the total return performance of the S&P 500 High Dividend Index. It also seeks to provide a high level of dividend income and the opportunity for appreciation.

Some of its 80 holdings include stocks, such as Philip Morris International, AbbVie, Hasbro, AT&T, CVS Health, Kimberly Clark, and Consolidated Edison to name a few. About 22.73% of the SPDY ETF portfolio is allocated to real estate. Nearly 17% is allocated to utility stocks. About 15.4% is allocated to consumer staples, with about 14.4% in financial stocks.

Its last quarterly dividend payment of $0.546774 was paid out on December 24, 2024.

Consumer Staples Select Sector SPDR ETF 

With economic uncertainty, market volatility, or inflationary pressures, the consumer staples sector is often considered a safe investment. The sector sells essential goods with historically strong demand. With an expense ratio of 0.08%, the Consumer Staples Select Sector SPDR ETF (NYSEARCA:XLP)  has 38 holdings, including Costco, Walmart, Coca-Cola, Procter & Gamble, and Target to name a few.

Staples—such as groceries and household items—are better equipped to handle price increases with ease. Many of these products are bought out of necessity.

Making the XLP ETF even more attractive, it yields 2.65%. Its last quarterly dividend of $0.602361 was paid out on December 26, 2024.

Utilities Select Sector SPDR ETF 

Utility stocks are also considered safe-haven opportunities. After all, it’s the utilities that provide essential services such as electricity, water, and natural gas, which people need regardless of economic conditions to millions of people.

With an expense ratio of 0.08%, the Utilities Select Sector SPRD ETF (NYSEARCA:XLU) has 31 holdings, including NextEra Energy, The Southern Company, Duke Energy, Constellation Energy, Vistra Corp. and Sempra to name a few. XLU yields 2.88%. Its last quarterly dividend payment of $0.627989 was paid out on December 26, 2024.

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