The Wall Street post-election rally has come to an abrupt halt, with all three major indexes retreating sharply from their record highs over the past week. A slight jump in inflation coupled with fresh comments from the Federal Reserve has raised concerns over the pace of future rate cuts and the economy’s health.

Given the ongoing volatility, it would be wise to invest in stocks from a defensive space like consumer staples such as Ingredion Incorporated INGR, McCormick & Company, Incorporated MKC and The Vita Coco Company, Inc. COCO.  Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Also, these belong to the category of low-beta stocks (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high-dividend yield and a favorable Zacks Rank.

Inflation Jumps Raising Concerns

Stocks rallied on Nov. 6, a day after Donald Trump’s win in the Presidential election. The rally gathered further pace after the Federal Reserve announced a 25-basis point rate cut, a day later. This saw the Dow surpassing 44,000 for the first time early last week, while the S&P 500 and Nasdaq set individual records.

However, the rally lost steam after fresh data released last week showed an uptick in inflation. The consumer price index (CPI) rose 0.2% sequentially in October and 2.6% from year-ago levels, up 0.2% from September. Core CPI, which excludes the volatile food and energy costs, rose 0.3% month over month and 3.3% annually.

The producer price index (PPI) rose 0.2% sequentially in October after increasing 01% a month earlier. Year over year, PPI increased 2.4% in October after climbing 1.9% in September.

Socks have since retreated from the earlier highs on growing concerns over the economy’s health. Although inflation has declined sharply over the past year, it is still above the Fed’s 2% target, which could make the central bank reassess its future rate cut plans.

Federal Reserve’s Comments Add to Volatility

The ongoing volatility is being fueled by fears of the Federal Reserve slowing its pace of rate cuts in the future. The Federal Reserve has cut interest rates by 75 basis points since September, taking its benchmark policy rate to the range of 4.5-4.75%.

Last week, the Federal Reserve Chairman Jerome Powell said that the central bank need not be “in a hurry” to cut rates if economic data allows so. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully,” Powell said.

Markets are currently pricing in a 58.4% chance of a 25-basis-point rate cut in December, which was 76.7% a month back. Given the Federal Reserve’s hawkish comments, the rate cut in December could be a close call.

Moreover, rate cuts are likely to be slower in 2025 if the economy continues to hold strong, which could keep markets volatile longer.

5 Low-Beta Consumer Staples Stocks With Upside

Ingredion Incorporated

Ingredion Incorporated is an ingredients solutions provider specializing in nature-based sweeteners, starches, and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.

Ingredion’s expected earnings growth rate for the current year is 12.5%. The Zacks Consensus Estimate for current-year earnings has improved 6.5% over the past 60 days. INGR currently sports a Zacks Rank #1. Ingredionhas a beta of 0.73 and a current dividend yield of 2.27%.

Image Source: Zacks Investment Research

McCormick & Company

McCormick & Company, Incorporated is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors to the entire food industry across the entire globe. MKC’s key sales, distribution and production facilities are located in North America and Europe. In North America, multiple facilities are found throughout the United States and Canada.

McCormick & Company’s expected earnings growth rate for the current year is 8.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. MKC currently has a Zacks Rank #2. McCormick & Company has a beta of 0.77 and a current dividend yield of 2.27%.

Image Source: Zacks Investment Research

The Vita Coco Company

The Vita Coco Company, Inc. provides a beverage platform. COCO’s brands include coconut water, Vita Coco; clean energy drink Runa; sustainable enhanced water, Ever & Ever and protein-infused water, PWR LIFT.

The Vita Coco Company’s expected earnings growth rate for the current year is 29.7%. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the past 60 days. COCO currently has a Zacks Rank #2. The Vita Coco Company has a beta of 0.22.

Image Source: Zacks Investment Research

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report

McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report

Ingredion Incorporated (INGR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research