Wall Street started 2024 on a high as stocks rallied on hopes that the Federal Reserve would soon begin to its rate cuts, with inflation sharply declining over the past year. The Dow, S&P 500 and Nasdaq ended January 1.2%, 1.6% and 1% higher, respectively.

The consumer confidence level also touched a 25-month high in January, with the index reading coming in at 114.8. Investors now believe that the economy will have a softer landing than expected earlier.

The Federal Reserve, at the end of its January FOMC meeting, indicated that interest rate hikes have likely ended. However, the optimism among market participants somewhat faded after Federal Reserve Chairman Jerome Powell said that it is unlikely that the central bank would be ready for a rate cut in March as inflation is still above its 2% target.

Investors were hopeful that the Fed would go for the first rate cut in March and follow up with two more rate cuts of 25 basis points each. Although markets are still pricing in three rate cuts of 25 basis points each this year, the Fed has indicated that higher interest rates are likely to stay for a longer period.

According to the CME FedWatch tool, the probability of the first rate cut in March was 73% just three weeks back and more than 90% in early January, but has now plummeted to 19.5%. This may make markets volatile again.

Stocks in Focus

In light of the current circumstances, investors seeking to protect their portfolios might consider dividend-yielding stocks as a prudent option. We recommend investigating stocks that have recently raised their dividend payouts.

Five such stocks are PACCAR Inc PCAR, Church & Dwight Co., Inc. CHD, Imperial Oil Limited IMO, Ramaco Resources, Inc. METC and The Cigna Group CI.

PACCAR Inc is a leading manufacturer of heavy-duty trucks in the world and has substantial manufacturing exposure to light/medium trucks. PCAR also designs and manufactures diesel engines and other powertrain components for use in its products and sale to third-party manufacturers of trucks and buses. PACCAR sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

On Feb 5, PACCAR announced that its shareholders would receive a dividend of $3.20 a share on Mar 6, 2024. PCAR has a dividend yield of 1.04%. Over the past five years, PACCAR has increased its dividend nine times, and its payout ratio at present sits at 11% of earnings. Check PACCAR’s dividend history here.

Church & Dwight Co., Inc. develops, manufactures and markets a broad range of household, personal care and specialty products. CHD is the leading U.S. producer of sodium bicarbonate, popularly known as baking soda, a natural product that cleans, deodorized, leavens and buffers.