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These 5 Stocks Have Been The Dow’s Biggest Winners When Rates Plummet

These 5 Stocks Have Been The Dow’s Biggest Winners When Rates Plummet

As the 10-year Treasury yield sinks lower, investors may want to consider these 5 stocks.

Nervousness around the ongoing trade war sent Treasurys rallying this week as investors shifted to a risk-off attitude.

The 10-year yield—which moves inversely to price—has fallen roughly 25 basis points in May, a 19-month low, as investors fled to the safe haven while the S&P dropped more than -4%.



But as the broader market struggles, history has shown that there are a handful of stocks that win big when yields fall.

According to CNBC, familiar names Coca-Cola (NYSE: KO), McDonald’s (NYSE: MCD), UnitedHealth (NYSE: UNH), Verizon (NYSE: VZ), and Walmart (NYSE: WMT) have been the best performers in the Dow in the 30-day periods when the 10-year yield has declined at least 20 basis points.

Of these names, Verizon has performed the best during periods of declining yields, having risen 1.78%, while UnitedHealth returned 1.36%, Coca-Cola returned 1.31%, McDonald’s 1.22%, and Walmart 1%. 



On average, during 30-day periods after the 10-year yield dropped more than 20bps, the S&P dropped -1.17%.

As yields have been falling this time around, two of these stocks are in the green while the other three are down just slightly. As of this writing, Verizon is up 1.73%, and UnitedHealth is up 4%, Walmart is down -0.70%, McDonald’s is down -0.78%, and Coca-Cola is down -0.92%.

It should come as no great surprise that these companies have proven to be winning bets in times of greater market uncertainties as each offer big dividends and are generally less effected by economic weakness.



Other stocks that have performed well during periods of falling yields include Pfizer (NYSE: PFE) and Merck (NYSE: MRK).

As there’s no end to the trade war in sight, low rates are likely to persist. Investors may want to keep an eye on these names as they could help bring stability to portfolios as the market continues to struggle and yields continue to slide lower.


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