Smart Investor: Undervalued Stocks That Raised Dividends, What’s Next for Stocks, and Bonds Take the Lead

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This week’s highlights:

Weekly Market Update: Stocks Fall 3.27% as Financial Sector Tumbles

12 Undervalued Stocks that Just Raised Dividends

What’s Next After a Volatile Week in the Markets?

Hot Stocks from 2024 Have Grown Cold

Bonds Take the Lead Over Stocks in 2025

What Is Stagflation, and Why Is It a Worry?

The bloom is off the rose for the optimism that swept the stock market in November. The Trump bump is gone, and in its place are headline whiplash and heightened economic uncertainty. This played out in dramatic fashion not just in US markets but across a wide swath of global markets, from Canada to Germany. The Morningstar US Market Index sank 3.3% and the market is now below where stocks were trading on Election Day 2024.

It was a wild week for the markets, with swings matching the back-and-forth news out of Washington. Sarah Hansen checks in with strategists about what could be next and how investors should best approach these markets.

This past week continued the rotation out of corners that had fueled the big bull market. As Bella Albrecht points out, 2024’s hot stocks have gone very cold, with many, like Palantir, posting big declines.

With stocks sagging, bonds are posting gains and fulfilling their roles as stabilizers in portfolios. Gabe Alpert looks at the outperformance of the bond market this year. He also dug into how concerns about a slowing economy are combining with worries about tariff-driven inflation to lead funds focused on inflation-protected bonds (aka TIPS) to solid returns this year.

If that pairing of weak growth and inflation sounds familiar, you might know it by another name: stagflation. We look at what stagflation means and why economists are seeing it as a growing risk.

Most US investors don’t look outside the country, but our team is reporting on the ripples spreading out from Washington across the globe. The Bank of Canada is seen as likely to aggressively slash interest rates to deal with the economic fallout of tariffs, even as the Canadian dollar weakens. Trump’s pullback from supporting Ukraine led to a massive rally in European defense stocks and prompted Germany to take an unprecedented step to loosen government spending. That sent German bond yields surging, and fund managers are scrambling to adapt to the new landscape.

If all this has your head spinning, you’re not alone. But Morningstar chief US market strategist David Sekera steps back and puts the current volatility into perspective, offering his take on opportunities for long-term investors.

In addition to all the news, we still have our regular features. Check out our lists of the best- and worst-performing stocks for February, which include a venerable semiconductor maker whose stock has suddenly come to life. Our weekly screen of newly overvalued stocks includes the company of perhaps the best-known investor in the world, that guy from Omaha.

Lastly, we’ve got our monthly look at undervalued stocks that just raised dividends. The list includes a handful of energy companies, a department store chain, and one of the world’s biggest package delivery companies.

Be sure to visit our Markets page for our latest coverage and live stock market updates, along with our weekly calendar of key upcoming data and events.