The confidence level of Americans has hit rock bottom triggered by soaring inflation and fears of a global trade war, following President Donald Trump’s announcement of hefty tariffs on a wide range of goods.

Also, a spike in inflation has forced the Federal Reserve to halt its rate cuts abruptly and it is unlikely to resume anytime soon. The uncertainty over the Federal Reserve’s next move and concerns over the nation’s economy have seen volatility return to markets this year after a stellar 2024.

Given this situation, it would be safe to invest in utility stocks, which are considered defensive. In this regard, NiSource Inc. (NI Quick QuoteNI - Free Report) , Atmos Energy Corporation (ATO Quick QuoteATO - Free Report) , Southwest Gas Holdings, Inc. (SWX Quick QuoteSWX - Free Report) and Entergy Corporation (ETR Quick QuoteETR - Free Report) are good picks. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Moreover, the stocks are from the low-beta category (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.

Consumer Confidence Plummets

The Conference Board’s consumer survey index fell to 98.3 in February, sharply below analysts’ expectations of 102.3, and the biggest drop since August 2021 and the lowest level since June 2024. This was the third consecutive month that consumer confidence showed a sharp drop.

The report came just a day after a separate report showed consumer sentiment hitting a 15-month low in February. The University of Michigan Consumer Sentiment Index fell to 64.7 in February from January's revised final reading of 71.7, hitting its lowest level since November 2023. Also, the reading came in lower than February’s initial reading of 67.8.

The consumer confidence reading follows a series of weak economic data released over the past week, raising concerns over the economy’s health. Several factors have been weighing on consumer’s confidence, with inflation being the biggest threat to the economy.

Inflation, Trump’s Tariffs Weigh on Consumer Sentiment

Inflation rose sharply over the past three months, compelling the Federal Reserve to halt its rate cuts. The Fed had already hinted at fewer rate cuts in 2025 after slashing interest rates by 100 basis points between September and December 2024.

The spike in inflation is likely to make the Federal Reserve take a more cautious approach and not rush for further cuts. Market participants were expecting the Fed to go for a rate cut in May but it is unlikely that the first rate cut will be done anytime before the second half of this year.

Further denting consumer confidence is Trump’s proposed tariffs. Trump has already announced 25% tariffs on Canadian and Mexican imports, which will now take effect from April 2. Meanwhile, he has already implemented a 10% tariff on various Chinese imports.

Besides, the President also announced 25% tariffs on goods imported from the European Union in the coming months. This has raised fears of a global trade war, which could further dent consumers’ confidence and make markets volatile.

4 Low-Beta Utility Stocks With Growth Potential

NiSource Inc.

NiSource Inc.,together with its subsidiaries, provides natural gas, electricity, and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 3.7 million customers in six states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana. NiSource has one of the nation’s largest natural gas distribution networks, as measured by the number of customers.

NiSource has an expected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. NI presently has a Zacks Rank #2. NiSource has a beta of 0.54 and a current dividend yield of 2.80%.

Atmos Energy Corporation

Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.4 million customers in more than 1,400 communities in eight states, from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energyoperates more than 72,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.

Atmos Energy has an expected earnings growth rate of 5.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. ATO presently has a Zacks Rank #2. Atmos Energy has a beta of 0.72 and a current dividend yield of 2.32%.

Southwest Gas Holdings, Inc.

Southwest Gas Holdings, Inc. is a regulated utility that provides natural gas services and has a wholly owned subsidiary, the Paiute Pipeline Company, through which it operates a pipeline transmission system.

Southwest Gas Holdings has an expected earnings growth rate of 16.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 60 days. SWX presently has a Zacks Rank #2. Southwest Gas Holdings has a beta of 0.44 and a current dividend yield of 3.29%.

Entergy Corporation

Entergy Corporation is primarily engaged in electric power production and retail distribution of power. ETR has 30,000 megawatt (MW) of generating capacity, including more than 8,000 MW of nuclear fuel capacity.

Entergy Corporation has an expected earnings growth rate of 6.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 60 days. ETR currently has a Zacks Rank #2. Entergy Corporation has a beta of 0.72 and a current dividend yield of 2.79%.