Trade policy uncertainty could bolster US defensive stock sectors

Trade tensions: The trading floor of the New York Stock Exchange. A burgeoning US trade war with China and the European Union has led investors to seek stability. — AP

NEW YORK: As the United States ramps up import tariffs and long-date US Treasury debt yields remain low, stocks in so-called defensive sectors may have room to run higher in price, even though expectations for the currently quarterly earnings seasons are high.

Stocks in defensive sectors, which generally pay steady dividends and have steady earnings, languished for the first months of 2018. Utilities, real estate, telecommunications and consumer staples all saw their stocks fall into early June even as the US benchmark S&P 500 index rose more than 4%.