Defensive Stocks Rise as Safe-Haven Trade Builds

Dividend-oriented blue chips outperformed on Tuesday as investors reduced exposure to growth and technology shares. Walmart, Verizon and Altria each gained roughly 3% by the close, bucking a broader decline that saw the Nasdaq Composite fall 1.4% as many tech names sold off.

The move reflected a search for stability in a session described as dominated by a “defense wins championships” mindset. Risk appetites are shrinking as concerns build over a possible bubble in artificial intelligence-linked stocks and sharp swings in traditional safe-haven assets.

Market participants also faced cross-currents from geopolitics and macro policy. In currency markets, the dollar index firmed near a one-week high, while the yen weakened ahead of a Japanese national election. In the U.S., investors continued to digest the nomination of Kevin Warsh as the next Federal Reserve chair and the rapid resolution of a brief government shutdown.

The buying interest in Walmart, Verizon and Altria was underpinned by company-specific developments that reinforced their income and cash-flow profiles. Walmart’s market capitalization moved above $1 trillion for the first time, supported by strong demand as shoppers seek bargain-priced food and household essentials in its stores and e-commerce channels.

Verizon is regaining wireless and fiber internet customers under its new chief executive, Dan Schulman. The company expects free cash flow to grow about 7% to more than $21 billion in 2026, helped by plans to add up to 1 million new retail postpaid phone subscribers.

Altria continues to face structural headwinds from declining U.S. smoking rates, but it paid $7 billion in dividends to shareholders in 2025 and projects adjusted earnings per share growth of as much as 5.5% in 2026. Those metrics, while not eliminating concern about long-term volume trends, have supported its status as a high-yield income stock.

Traditional havens also saw pronounced moves. Spot gold recovered sharply, trading back above $5,000 an ounce after what was described as a recent rout. On Wednesday it was up about 2.2% at $5,044.74, following a 5.9% jump the previous session that marked its biggest daily gain since November 2008.

Silver, platinum and palladium advanced as well, with silver up around 2.1%. The precious metals rebound came as the dollar softened slightly from recent gains, even as investors weighed the implications of Warsh’s expected approach to shrinking the Fed’s balance sheet, which can pressure non-yielding assets over time.

In energy markets, Brent crude rose about 1% to just under $68 a barrel and U.S. crude climbed a similar amount to nearly $64. Prices were supported by heightened tensions in the Middle East after the U.S. military shot down an Iranian drone near the Abraham Lincoln aircraft carrier and Iranian gunboats approached a U.S.-flagged tanker in the Strait of Hormuz.

Beyond single-day moves, investors are reassessing the balance between growth prospects and policy risks. In the U.S., the end of a partial government shutdown removed an immediate fiscal overhang but delayed key economic data releases, including the January employment report.

In fixed income, markets are pricing at least two interest rate cuts from the Fed in 2026, while some strategists expect Warsh to combine rate reductions with balance sheet contraction, a mix that could influence both long-term yields and inflation expectations.

Against this backdrop, the appeal of companies with visible cash flows and established dividend records has increased. The rotation into defensive equities, alongside renewed interest in precious metals and continued support for the dollar, underscores a broader risk-off tone as investors navigate AI-related optimism, geopolitical uncertainty and evolving central bank leadership.