Yesterday, U.S. stocks declined broadly due to increasing worries about rising inflation and Fed's planned aggressive interest rate increases to combat inflation. Furthermore, the resurgence of COVID-19 cases in China and other parts of the world and subsequent strict lockdown measures might hurt global economic growth, maintaining pressure on the United States and global equity markets. Over the past five days, the S&P 500 Index has retreated 2.2%, while the NASDAQ Composite Index has declined 2.5%. Furthermore, Morgan Stanley equity strategists predict that the S&P 500 might soon enter negative territory, indicating a 20% decline from its previous highs.
In the current scenario, the investors are being drawn toward dividend stocks because they could potentially hedge against current market uncertainties and generate a regular source of income. The investors' interest in dividend stocks is evident in SPDR S&P Dividend ETF's (SDY) 5.1% gains over the past year.
