On Thursday, the broad market indices closed in the red. The Dow closed down 300 points, the S&P 500 slipped about 1.5%, while the Nasdaq Composite declined 2%, as market sentiment was weighed down by Fed chair Jerome Powell’s statement regarding the potential for larger-than-usual interest rate hike in the coming month. Also, Goldman Sachs Group Inc. (GS) sees the benchmark S&P closing at 4,700 this year in the best-case scenario or declining to end at 3,600 in a recessionary scenario.
Non-cyclical stocks are from companies that enjoy stable demand for their products even in economic downturns. The consumer non-cyclical sector looks resilient in the face of inflation, given that the Consumer Staples Select Sector SPDR Fund (XLP) has gained 4.4% year-to-date, while the broader SPDR S&P 500 ETF Trust (SPY) has declined 7.8% over the same period.
