Volatility has defined markets in 2026, with economic and geopolitical uncertainties continuing to drive market swings and shape investor sentiment. Near-term relief appears unlikely, as ongoing Middle East tensions and an elusive ceasefire agreement keep investor risk appetite in check.

Fresh U.S. strikes on multiple targets in Iran on Wednesday evening have escalated tensions further, putting pressure on the already fragile ceasefire situation and the markets. The S&P 500 Index fell about 1.6% on Wednesday, extending its recent losses. The broad market benchmark is down roughly 3.6% over the past five trading sessions and about 1.6% over the past month.

However, geopolitical risks are only part of the equation. Recent weakness in the technology sector, coupled with accelerating inflation, suggests that market concerns extend well beyond developments in the Middle East, reinforcing uncertainty surrounding the economic outlook and heightening investor caution.

The Nasdaq composite declined roughly 2% on Wednesday, extending its recent losses. Over the past five trading sessions, the tech-heavy index has fallen about 5.15%, signaling sustained weakness in the tech sector.

Signs of growing investor anxiety can also be seen in the CBOE Volatility Index (VIX), which reflects market expectations of near-term volatility. The volatility index has surged around 30% over the past five trading sessions but has fallen about 7.1% in the last trading session, suggesting continued volatility and unstable sentiment rather than a clear directional trend. The index has added about 39% year to date and 9.91% over the past month, reflecting heightened investor anxiety fueled by geopolitical tensions and lingering economic uncertainty.

Amid this uncertainty, markets have increasingly adopted a "sell first, ask questions later" mentality, with negative headlines often triggering outsized reactions. This has amplified short-term volatility, prompting investors to become more risk-averse with time and turning their attention to more stable investment strategies like value investing.

Value Investing Explained

Investors can leverage value investing, a strategy particularly compelling in today’s economic environment. Value investing focuses on purchasing stocks that are undervalued, based on some fundamental analysis, relative to their intrinsic value. Value investors actively seek out stocks currently overlooked by the market and aim to profit by purchasing them at a discount compared to their intrinsic value.

By purchasing and holding these undervalued stocks for the long term, value investors rely on the expectation that the market will eventually recognize their true value, allowing them to reap significant rewards.

The S&P 500 Value Index has gained about 6.02% in this quarter so far and 16.36% over the past year. Compared with growth stocks, value stocks are generally perceived as more stable and less volatile, making them an attractive option for investors seeking risk-managed equity exposure amid ongoing market uncertainty.

Why ETFs Are an Easy Way Into Value Investing

Value investing requires patience and discipline, as determining a stock’s intrinsic value involves careful financial analysis and judgment, making the process often complex and time-intensive. Value investing through ETFs offers investors an easy and accessible way to follow this strategy, serving as a practical alternative that simplifies implementation and reduces the complexity of stock selection.

Value funds can help cushion portfolios during periods of market volatility, reflecting their exposure to more stable, fundamentally strong companies. The strategy is best suited for investors with a medium to long-term horizon, where patience and compounding can play a greater role. Additionally, value ETFs can serve as a source of income through dividends.

Adopting a value investing approach can also serve as an effective diversification tool for investors looking to strengthen portfolio resilience. Below, we have presented a selection of value ETFs that offer exposure to this strategy, with all the mentioned funds having a Zacks ETF Rank #1 (Strong Buy).

Investors can consider Vanguard Value ETF (VTV Quick QuoteVTV - Free Report) , iShares Russell 1000 Value ETF (IWD Quick QuoteIWD - Free Report) , iShares S&P 500 Value ETF (IVE Quick QuoteIVE - Free Report) , State Street SPDR Portfolio S&P 500 Value ETF (SPYV Quick QuoteSPYV - Free Report) and Schwab U.S. Large-Cap Value ETF (SCHV Quick QuoteSCHV - Free Report) .