U.S. stocks closed out February in the red, and the S&P 500 Index ($SPX) is now up just over 1% for the year. Amid concerns ranging from a growth slowdown to trade wars, sticky inflation, and a slower trajectory for the Fed’s rate cuts, defensive stocks have done relatively well this year.
To be sure, there is much to worry over about the economy and, by extension, the stock market. The artificial intelligence (AI) euphoria has faded, and the mere mention of the word “AI” during earnings calls is not being cheered. Instead, markets are questioning tech companies’ ability to generate returns on their AI investments. Even the formidable Nvidia (NVDA) hasn’t been able to convince markets despite posting better-than-expected earnings for its fiscal Q4 2025.
