The S&P 500’s (SP500) Consumer Staples sector (NYSEARCA:XLP) was the lone gainer in Thursday’s stock rout, a move in line with a suggestion from The Bahnsen Group’s leader to focus on defensive areas as markets digest the Trump administration’s tariff plans.  

Trump late Wednesday said the U.S. would implement a minimum baseline 10% tariff on imports worldwide, with some rates sharply higher. The S&P 500 (SP500) sank -4.8%, but Consumer Staples(NYSEARCA:XLP) rose +0.7%, outperforming the benchmark’s (SP500) ten other sectors. 

“Our main message for investors is to stay defensive by focusing on stocks that have strong cash flows, a long history of growing their dividend, and ones that can withstand any kind of economic environment,” David Bahnsen, chief investment officer of The Bahnsen Group, which oversees $7B in assets under management, said in a Thursday note. 

Verizon (NYSE:VZ), Merck (NYSE:MRK), and Procter & Gamble (NYSE:PG) are defensive stocks to consider, Bahnsen said. Meanwhile, the “riskiest and most expensive parts of the market,” including Big Tech, many of AI-related names and consumer discretionary sectors, will be hit in the current risk-off environment, he said. 

A "Q2 or Q3 recession is very possible, as is a bear market,” if the current slate of tariffs hold, Bahnsen said.

“The question is, ‘Does President Trump seek some sort of off-ramp for these policies if and when we see a bear market in the stock market?,” the CIO said. “We believe Trump will then pivot to focus on the number of companies that are making significant investments in the U.S., but it's unclear that would reverse market sentiment.” 

Verizon (NYSE:VZ) rose 2% on Thursday, and Merck (NYSE:MRK) slipped 0.2%. The ~$17B Consumer Staples Select Sector SPDR ETF (XLP) gained +0.6%. Here’s how its 10 biggest holdings performed Thursday: 

• Costco (NASDAQ:COST): +0.2%
• Procter & Gamble (NYSE:PG): +1.7%
• Walmart (NYSE:WMT): -2.8%
• Coca-Cola (NYSE:KO): +2.6%
• Philip Morris (NYSE:PM): +3.8%
• PepsiCo (NASDAQ:PEP): +1.5%
• Colgate-Palmolive (NYSE:CL): +2.6%
• Mondelez International (NASDAQ:MDLZ): +2.7%
• Altria (NYSE:MO): +1.4%
• Target (NYSE:TGT): -10.9% 

Other Consumer Staples ETFs include: (VDC), (IYK), (FSTA), (KXI), and (RSPS).

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