The stock market has been under pressure amid the Federal Reserve's impending interest rate increases and sky-high inflation. According to the Conference Board, its consumer confidence index slid to 106.4 in May from 108.6 in April. However, defensive sectors like healthcare tend to deliver stable returns despite pullbacks because of the relatively inelastic demand for their goods and services.
Furthermore, the resurgence of the COVID-19 cases is expected to keep the healthcare industry in the limelight in the near term. Because global demand for healthcare goods and services is surging, investors are expected to increasingly defend their portfolios against the market’s fluctuations with healthcare stocks that are financially robust and are well positioned to withstand volatility. Investors’ interest in the healthcare industry is evident in the Health Care Select Sector SPDR’s (XLV) marginal gains over the past six months compared to the SPDR S&P 500 Trust ETF’s (SPY) 9.4% decline.
