Major indexes in the United States notched a sensational rally in the first three months of 2024. However, their upward trajectory came to a screeching halt in April. The S&P 500, the Nasdaq and the Dow are currently on track to post their first negative month since October.

The broader S&P 500 and the tech-laden Nasdaq eked out losses for the sixth straight trading session on Apr 19, while the 30-stock Dow is on the verge of erasing its gains since the beginning of this year. Moreover, the Nasdaq logged losses for the fourth consecutive week, its longest losing streak not seen since December 2022.

Instability spiked in the stock market, with Wall Street’s fear gauge, the Cboe Volatility Index, hovering near its long-term average. CNN’s Fear & Greed Index, too, showed a “fear” reading last week, in contrast to “greed” a month ago. So, what stalled the stock market from scaling northward?

Technology stocks led by the so-called magnificent seven – NVIDIA, Tesla, Amazon, Meta Platforms, Google parent Alphabet, Microsoft, and Apple –  slumped on stretched valuation apprehensions. The magnificent seven stocks shredded a collective $950 billion from their total market capitalization on Friday. Most importantly, sticky inflation and rising tensions in the Middle East dampened investors’ confidence.

Prices of indispensable commodities remained elevated on the back of a healthy labor market and relentless increase in consumer outlays. Both consumer and wholesale prices heated up in March. Employers added an astounding 303,000 new jobs in March, easily surpassing estimates. At the same time, spending at U.S. retailers increased for the second successive month in March despite interest rates being perched at a record high.

However, the indomitable strength of the economy vis-à-vis stubborn inflation dashed hopes of any interest rate cut soon. Higher interest rates undesirably increase the cost of borrowing, hamper consumer spending, dent economic growth and cause market upheavals.

Adding to investor concerns is the brewing tension between Israel and Iran. Over the weekend, Iran launched missiles and drones at Israel, which were intercepted and failed to create any major impact, per Israeli forces. However, fears remain about a spillover in the rest of the areas in the Middle East.

Thus, with things looking dicey for the stock market as of now, it’s prudent for astute investors to place their bets on dividend aristocrats like Atmos Energy Corporation (ATO Quick QuoteATO - Free Report) , Ecolab Inc. (ECL Quick QuoteECL - Free Report) and The Sherwin-Williams Company (SHW Quick QuoteSHW - Free Report) for risk-adjusted returns.

They have a better-quality business and solid financial structure, which keep them immune to market vagaries. These stocks possess a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Atmos Energy is engaged in regulated natural gas distribution and storage business. Atmos Energy is known for having raised its dividend for 39 years.

Atmos Energy has a dividend yield of 0.93%. ATO’s payout ratio presently sits at 23% of earnings. ATO’s payout has advanced by 12.8% in the past five years. Check Atmos Energy’s dividend history here.

The Zacks Consensus Estimate for its current-year earnings has increased 0.3% over the past 60 days. The company’s expected earnings growth for the current year is 8%.

Ecolab is a sustainability provider offering water, hygiene, and infection prevention solutions and services. Ecolab has raised its dividend for over 30 years.

Ecolab has a dividend yield of 1.05%. ECL’s payout ratio presently sits at 44% of earnings. ECL’s payout has increased by 4.4% in the past five years. Check Ecolab’s dividend history here.

The Zacks Consensus Estimate for its current-year earnings has increased 0.5% over the past 60 days. The company’s expected earnings growth for the current year is 23.2%.

SherwinWilliams is into manufacturing and sales of paints, coatings and related products. SherwinWilliams has raised its dividend for 44 years in a row.

SherwinWilliams has a dividend yield of 0.93%. SHW’s payout ratio presently sits at 23% of earnings. SHW’s payout has advanced by 12.8% in the past five years. Check SherwinWilliams’ dividend history here.

The Zacks Consensus Estimate for its current-year earnings has increased 0.6% over the past 60 days. The company’s expected earnings growth for the current year is 10.7%.

Shares of Atmos Energy, Ecolab and SherwinWilliams have gained 0.8%, 31.4% and 29.3%, respectively, in the past year.

Image Source: Zacks Investment Research