The stock market has been exhibiting immense volatility lately due to various macroeconomic and geopolitical factors. On Wednesday, the Federal Reserve raised its benchmark interest rate by 50 basis points, its biggest rate hike since 2000, to tame inflationary pressures. Given the growing concerns over skyrocketing inflation, the Fed's hawkish tilt, a geopolitical crisis, rising COVID-19 cases in China, and deepening supply chain constraints, the stock market is expected to remain under pressure in the coming months.
Last month, the U.S. stocks experienced one of their worst selloffs. As a result, several quality mega-cap stocks are currently trading below their intrinsic values. Mega-cap stocks tend to deliver steady returns based on their broader market reach, pricing power, and strong fundamentals. Furthermore, mega-cap companies are more stable and can better withstand a market downturn than small- and mid-cap companies.
