A select few stocks with defensive characteristics should be immune from the market volatility that might result from President Donald Trump’s Wednesday tariff announcement . Uncertainty around the mounting trade war has troubled markets lately, sending stocks lower to begin the year. All three major indexes are now trading below the levels with which they began 2025. Investors have also swapped out high-flying growth names for their more defensive counterparts, favoring sectors such as consumer staples and utilities. Investors will get further details on April 2 when Trump is expected to unveil new tariffs, including the start of reciprocal duties, at 4 p.m. ET. To search for stocks that can withstand tariff-related market volatility, CNBC Pro screened the S & P 500 for defensive plays. The names had to meet the following criteria: Have high U.S. revenue exposure (80% or greater) Be very stable relative to the overall market (beta of 0.6 or lower) Have low debt (debt-to-equity ratio below 75%) One name on the list was financial services stock CME Group , up 13% this year. CME, which operates a derivatives trading marketplace, could benefit from the market turmoil that has come from trade war-induced uncertainty. Raymond James recently upgraded CME Group to outperform from market perform, pointing out that the company is well positioned “in a volatile global macroeconomic and geopolitical backdrop.” Eight out of 18 analysts covering the stock rate it a hold, per LSEG, and consensus prices call for a marginal decline from current levels. Aerospace and defense stock General Dynamics could also be a good volatility hedge. Shares have popped 4% this year. In a March note, Citi analyst Jason Gursky reiterated his bullishness on the defense sector , pointing to catalysts such as Trump’s plans to fund a missile defense dome over the U.S., as well as Europe’s continued defense spending. “Defense spending in Europe is likely headed significantly higher and the US Congress recently passed budget resolutions that add upward of $300B in spending over the next ten years,” Gursky said. “Importantly, this spending growth is likely to favor modernization in order to buy deterrence against near peers. As such, we think it’s time to buy defense stocks.” Specifically, the analyst highlighted General Dynamics as a buy-rated defense stock that has upside ahead. Last week, General Dynamics was awarded a $1.07 billion contract with the U.S. Navy. The stock is well liked on Wall Street, with 13 out of 25 analysts rating it a buy or strong buy, per LSEG. Consensus price targets call for about 5% upside. Beverage manufacturer Keurig Dr Pepper has added nearly 9% this year. This week, Morgan Stanley analyst Dara Mohsenian upgraded the stock to an overweight rating from equal weight. “We also see KDP as a safe haven in a market downturn, with [a] defensive business mix and limited tariff/FX risk, albeit some SNAP risk,” the analyst wrote, referring to the Supplemental Nutrition Assistance Program for low-income households. Eleven out of 20 analysts covering the beverage stock rate it a buy or strong buy, and consensus price targets suggest nearly 10% upside, according to LSEG. Other names on the list included a series of insurers such as Assurant , Progressive and Allstate . Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
