Wall Street has been on a rally over the past month, with the S&P 500 and the Nasdaq hitting multiple new record highs over the past two weeks. Investor confidence has been lifted by positive developments in trade negotiations and a strong earnings season.

Despite this momentum, concerns about the overall health of the economy persist. Inflation remains high, and the Federal Reserve is not expected to cut interest rates in its upcoming July meeting. Also, the potential effects of newly implemented tariffs continue to create uncertainty, which could lead to renewed market volatility.

Given the uncertainty, it would be ideal to invest in safe-haven defensive stocks from the utility and consumer staples sector, such as Entergy Corporation (ETR Quick QuoteETR - Free Report) , Fortis, Inc. (FTS Quick QuoteFTS - Free Report) , Northwest Natural Holding Company (NWN Quick QuoteNWN - Free Report) and Ingredion Incorporated (INGR Quick QuoteINGR - Free Report) . 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.

Also, these 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.

Fed Likely to Keep Rates Steady

The Federal Reserve is unlikely to cut interest rates in its upcoming FOMC meeting that begins on July 29. Solid economic data suggest that the U.S. economy remains resilient. Retail sales rose by 0.6% in June compared to the previous month, indicating continued consumer spending despite inflationary pressures. While Trump’s tariffs are beginning to take a toll, shoppers are still active in the market.

Inflation also climbed in June, with the Consumer Price Index (CPI) increasing 0.3% after a 0.1% rise in May. This spike is largely due to higher prices on consumer goods, driven by tariffs.

This has made the Federal Reserve maintain a hawkish stance, as it believes that tariffs could elevate inflation further. Trump has been slamming Fed Chair Jerome Powell for not cutting interest rates. However, the central bank has adopted a wait-and-watch policy, with Powell saying that Fed officials are in no rush to cut interest rates.

The Federal Reserve is expected to maintain its current interest rate range of 4.25-4.5%, which has remained unchanged since December. Also, fresh tariffs, which are set to take effect after the Aug. 1 deadline, are adding to market uncertainty. With inflation remaining high and no rate cuts in sight, markets could turn volatile again.

4 Low-Beta Defensive Stocks With Growth Potential

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 6.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. ETR currently has a Zacks Rank #2. Entergy Corporation has a beta of 0.59 and a current dividend yield of 2.72%.

Fortis, Inc.

Fortis, Inc. is engaged in the electric and gas utility business. FTS offers regulated utilities comprising electric and gas, as well as engages in non-regulated hydroelectric operations. Fortis operates primarily in Canada, the United States and the Caribbean.

Fortis has an expected earnings growth rate of 4.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 60 days. Currently, FTS carries a Zacks Rank #2. Fortis has a beta of 0.48 and a current dividend yield of 3.63%.

Northwest Natural Holding Company

Northwest Natural Holding Company builds and maintains natural gas distribution systems, as well as invests in natural gas pipeline projects through its subsidiaries. NWN serves residential, commercial and industrial customers primarily in the United States, Canada and Service Territory.

Northwest Natural Holding Company has an expected earnings growth rate of 23.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 60 days. NWN presently has a Zacks Rank #2. Northwest Natural Holding Company has a beta of 0.53 and a current dividend yield of 4.80%.

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 6.8%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. INGR carries a Zacks Rank #2. Ingredionhas a beta of 0.72 and a current dividend yield of 2.40%.