3 Defensive Stocks to Watch as Trade Tensions Resurface: GILD, JNJ, KR

Renewed U.S.-China trade tensions, sparked by President Trump's proposed 100% tariff on Chinese goods, led to over 2% declines in the S&P 500 and Nasdaq, prompting a focus on defensive investments. The article highlights Gilead Sciences (GILD) and Johnson & Johnson (JNJ) for their strong medical sector performance, robust drug pipelines, and attractive dividends around 2.7%, both up over 25% year-to-date. Additionally, Kroger (KR) is noted as a defensive retail grocery leader, up 13% in 2025, offering reasonable valuation multiples and a dividend yield exceeding 2%, making these Zacks Rank #3 (Hold) stocks appealing amidst market volatility.

Analysis

Resurfaced U.S.-China trade tensions, driven by President Trump's proposed 100% tariff on Chinese goods effective November 1st, triggered a significant market downturn, with the S&P 500 and Nasdaq both declining over 2%. This escalation, following China's new export controls, heightens geopolitical uncertainty and prompts investors to seek defensive portfolio allocations.

Gilead Sciences (GILD) and Johnson & Johnson (JNJ) are highlighted as strong defensive plays within the medical sector, both up over 25% year-to-date and near 52-week highs. Their robust drug pipelines and essential healthcare offerings underpin stability. Both companies offer attractive dividend yields of approximately 2.7%, significantly exceeding sector and S&P 500 averages.

Kroger (KR), a leading retail grocery chain, also presents a defensive appeal, with its stock up 13% in 2025 (likely YTD) and trading at a reasonable 14x forward earnings multiple. The company demonstrates steady top and bottom-line expansion, earning an 'A' Zacks Style Scores grade. Kroger further enhances its profile with an annual dividend yield over 2% and a sustainable 28% payout ratio.

Despite their strong defensive characteristics and essential operations, GILD, JNJ, and KR currently hold a Zacks Rank #3 (Hold). Their resilience and dividend appeal position them favorably to attract capital should broader market volatility persist.

Key Decisions for Investors

• Investors should consider increasing exposure to defensive sectors like healthcare and consumer staples to buffer against escalating trade tensions and market volatility.
• Evaluate Gilead Sciences (GILD) and Johnson & Johnson (JNJ) for their demonstrated resilience, strong pipelines, and attractive 2.7% dividend yields as potential stable core holdings.
• Assess Kroger (KR) for its defensive value, reasonable 14x forward earnings multiple, and sustainable dividend growth, offering stability in uncertain economic environments.
• Closely monitor developments in U.S.-China trade relations, as further escalation or de-escalation could significantly impact market sentiment and sector-specific performance.