The market is experiencing raging volatility due to factors like index rebalancing, portfolio adjustments, high inflation, and debt ceiling concerns. With a temporary rise in the debt limit, the possibility of a default still hovers. As experts expect a correction in the near term, dividend stocks such as Coca-Cola Company (NYSE:KO), CVS Health (NYSE:CVS), Dow Inc. (DOW), and Sysco Corp (SYY), offering a stable income stream, could be solid bets now.Driven by investors’ concerns over rising inflation and U.S.-China trade tensions, the dollar eased, and a gauge of global equity markets fell on Monday. "In the past, escalation of U.S.-China trade tensions has sparked risk off among investors," said Marc Chandler, chief market strategist at Bannockburn Global Forex. Moreover, the U.S. Senate temporarily raised the $28.4 trillion debt limit to avoid a potential default. This gives the administration a timeframe of eight weeks to address the issue. This, combined with seasonal factors like index rebalancing and portfolio adjustments, are leading to heightened market volatility.
The market volatility is evident from the recovery of the major indexes yesterday, with Dow gaining almost 340 points while S&P 500 rose 0.8%. Moreover, a recent Bankrate poll revealed that market experts expect a more than 10% correction within the next year, with a third of the analysts expecting a correction anytime over the next six months.
Given the market volatility, shares of fundamentally sound dividend-paying companies The Coca-Cola Company (KO), CVS Health Corporation (CVS), Dow Inc. (DOW), and Sysco Corporation (NYSE:SYY) could be quality bets to ensure a steady stream of income.