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When markets get volatile, investors tend to flock to safe haven sectors that can offer stability regardless of whether experts deem the economy to be in a recession. One of those sectors is utilities.
The S&P 500's recent fluctuations may be causing some investors to reevaluate their strategies, but the utilities sector is seen as a secure option. If volatility continues, traders may want to consider utilities not only as a safe option, but also as a way to indirectly invest in artificial intelligence (AI).
With big tech leading the current market rally, a risk-on sentiment fueled by the anticipation of rate cuts may have pushed safe haven sectors like utilities in the background. That said, a rebound could be underway that could potentially push utilities higher.
The stock market has stumbled out of the gate early in 2024. But investors can look to positive earnings reports during the fourth quarter.
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