Macroeconomic and geopolitical concerns have weighed on investors’ sentiment, leading to a broad market sell-off since the beginning of the year. To combat the elevated inflation, the Federal Reserve is set to hike the benchmark federal funds rates ‘significantly’ this month.
As the equity markets tend to have a bearish response to interest rate hikes, the basic material stocks typically depict resiliency, as these companies pass on the higher costs to consumers. The demand for basic materials remained robust due to the resumption of operations across major sectors. Moreover, the infrastructure bill is expected to boost the use of basic materials in the country.
