The economic sanctions on Russia have contributed to rising crude oil and commodity prices and stock market volatility. And surging inflation is driving a significant downturn in the stock market again, following a brief correction in March. According to a Labor Department forecast, U.S. inflation hit a new 40-year record in March; the U.S. consumer prices jumped 8.5% year-over-year. Furthermore, the Fed's tighter monetary policy to combat inflation, surging U.S. Treasury bond yields, deepening supply chain issues owing to the Russia-Ukraine war, and resurgence of COVID-19 cases across different countries are adding to the market’s volatility. This is evident in the CBOE Volatility index's 17.8% gains year-to-date.
Amid the heightened market volatility, dividend stocks are considered solid investments because they can potentially hedge against market fluctuations and help generate a regular portfolio income stream. Investors' interest in dividend stocks is evidenced by iShares Core High Dividend ETF's (HDV) 13.6% gains over the past year.
