Major asset managers including BlackRock have turned defensive on U.S. equities due to rising Treasury yields and AI-related risks. Market breadth shows significant weakness with 84% of S&P 500 stocks trading below their all-time highs. Investors are advised to consider cash-flow-focused ETFs, short-term bonds, and AI-related investments as potential defensive strategies.
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Global X U.S. Cash Flow Kings 100 ETF · NYSE ARCA
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Billionaire investor Ray Dalio cautions that rising Treasury yields and narrowing equity-bond return differentials could pressure stock valuations. He emphasizes that investors should focus on free cash flow rather than headline earnings, as companies may report profit growth while spending heavily on investments. Several ETFs targeting cash-generative companies are highlighted as potential investment vehicles in this environment.
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