The market has been on edge for a while, but it hit a fever pitch this week as Wall Street flirted with a correction over tariff fears and a possible trade war.
As analysts are scrambling to identify sectors best positioned to weather President Donald Trump’s trade policies, one common answer keeps coming up: healthcare.
"America is aging, and no tariff will slow that trend," said CapWealth Research Director Grant Stark. “There will likely be more demand for advanced medicines, skilled care, and other health-related segments.”
How real is tariff long-term threat?
Tariff talk isn’t new.
Uncertainty has been mounting since Trump’s election. But while analysts widely agree that tariff-related fears are a driving force behind market instability, opinions vary on the long-term impact.
“Tariffs of this size and magnitude haven’t happened in about 100 years,” said Ritholtz Wealth Management’s Callie Cox. “We’re working with a pretty unprecedented change in policy here.”
As trade disputes with Mexico, Canada, and China escalate, markets have responded with a sharp selloff.
The auto industry is particularly exposed due to its reliance on imported parts. A one-month delay on Mexican and Canadian import tariffs announced this week buys U.S. automakers some time.
But Barclays analysts warn that tariffs “could wipe out effectively all profits” for General Motors (GM), Ford (F), and Stellantis (STLA).
“These exemptions don’t do much to resolve the general air of uncertainty,” said BMO Wealth Management Chief Investment Officer Yung-Yu Ma. “Businesses will remain cautious until there’s more clarity on tariffs.”
Investors are expected to follow suit, which is why sectors like healthcare remain attractive to analysts like Stark and Brian Mulberry of Zacks Investment Management. Both recommended CVS Health Corp (CVS) as a potential winner.
Healthcare is one of the few pockets of the market that has stayed afloat while Trump wages a trade war with both adversaries and allies.
Mulberry, who believes the market’s tariff reaction is “a little overdone,” still advised caution when it comes to pharmaceutical firms with overseas operations and health-related companies vulnerable to tariffs.
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