#defensive-stocks

#defensive-stocks

Mega cap tech stocks have continued to be the key growth engine for the U.S. economy. For many young investors that started investing after the great financial crisis, this has been the way it's been for as long as can be remembered. That said, the reality is that we're living in a much higher valuation environment today than we've seen in many years. And it's also true that over the very long-term, valuations will eventually revert toward some sort of equilibrium level.

Markets often rally in anticipation of rate cuts but then decline when the actual rate cuts are implemented. J.P. Morgan's trading desk recently warned that despite stocks setting "more than 20 all-time highs this year," the Federal Reserve's next rate cut "threatens to curb investors' zeal" through a potential "sell the news" drop. The S&P 500 is up almost 33% from its lows in April and is up nearly 13% for 2025.

Shares of Waste Management Inc. ( NYSE: WM) have retreated from a $242.58 all-time high in June and are down 7.3% since then. Year to date, the stock is 11.5% higher, narrowly outperforming the S&P 500. As the market continues to run higher after a significant downturn earlier in the year, the industrials sector staple maintains its position as a defensive stock, with the company currently boasting 84% institutional ownership.