After a red-hot 2024, questions loom over whether the U.S. economy can keep up its momentum in 2025. Between rising geopolitical tension, sticky inflation, and Donald Trump returning to the White House, recession warnings are popping up again. Yet, history shows that downturns can also be openings for bold investors.
So, what’s the best stock to invest in for 2025 if the U.S. enters a recession? We’ve picked a list of companies with strong fundamentals, reliable revenue streams, and the kind of pricing power that doesn’t vanish when things get rocky.
Is a U.S. Recession Coming in 2025?
Economic data has been sending mixed signals. Job growth remains steady, but household debt is climbing and retail spending has cooled. Some analysts believe the U.S. may avoid a hard landing, but others point to aggressive rate hikes from 2022–2023 catching up with borrowers.
The return of Donald Trump is another wildcard. His administration is expected to revive some pro-business policies like tax cuts and deregulation. But with that comes market unpredictability. During his previous term, even a single offhand remark about tariffs or foreign policy could swing global markets. Already, there’s talk of a possible 60% tariff on Chinese goods—which, if enacted, could fuel inflation and strain supply chains all over again.
Read more: A Look at 7 Devastating Economic Crises in the United States of America
What Makes a Recession-Proof Stock?
When recession risks rise, investors typically look for companies that:
- Sell essential products or services
- Have low debt and high cash flow
- Maintain strong dividends or recurring revenue
These types of businesses tend to ride out the turbulence better than highly leveraged or speculative firms.
6 Stocks to Watch in 2025 (With YTD Performance)
| Stock | Sector | Why It’s Resilient | YTD Performance (2025) |
|---|---|---|---|
| Costco (COST) | Consumer Staples | Steady demand for essentials | +12.4% |
| Johnson & Johnson (JNJ) | Healthcare | Strong pharma pipeline and dividend | +4.1% |
| Microsoft (MSFT) | Tech | Enterprise software and AI positioning | +19.3% |
| Zoetis (ZTS) | Animal Health | Stable sector with growth from pet care | +6.7% |
| McDonald’s (MCD) | Food Service | Affordable dining in downturns | +9.8% |
| BlackRock (BLK) | Finance | Diverse ETF offerings, benefits from market rebound | +15.5% |
Data as of May 2025. Sources: Yahoo Finance, Google Finance.
Costco (COST)
Costco thrives during downturns because it sells essentials in bulk at lower prices. Its membership model drives loyalty and recurring revenue, which cushions earnings even when inflation bites. In early 2025, foot traffic and renewals remained strong.
Johnson & Johnson (JNJ)
J&J is a classic defensive stock. With leading positions in pharma and medical devices, it benefits from stable demand regardless of economic conditions. Its dividend consistency and pipeline of new treatments add long-term appeal.
Microsoft (MSFT)
While tech can be sensitive to rate hikes, Microsoft’s enterprise ecosystem makes it a dependable growth engine. Azure, Office, and AI integration through OpenAI give it multiple profit levers. The company’s balance sheet remains rock-solid in 2025.
Zoetis (ZTS)
The pet health boom hasn’t slowed. Zoetis leads in animal pharmaceuticals, with a diverse range of treatments for pets and livestock. Even during economic stress, pet owners continue to prioritize care—giving Zoetis a reliable edge.
McDonald’s (MCD)
Fast food often does well during economic slowdowns. McDonald’s dominates thanks to global reach, tech-enabled drive-thrus, and brand loyalty. In Q1 2025, sales rose in both developed and emerging markets.
BlackRock (BLK)
As investors regain confidence and markets recover, BlackRock’s asset flows increase—especially via its iShares ETFs. The firm also benefits from its expansion into private markets and infrastructure funds, giving it broader exposure than most peers.
Can You Really Time the Market?
With so much political noise, especially from the Trump administration, trying to call every market top and bottom is a losing game. The smarter approach? Focus on strong businesses and consider dollar-cost averaging to build positions over time.
That way, you’re not reacting every time Trump tweets or drops a surprise policy change that rattles the indexes—like in 2018, when Trump’s trade threats sent the Dow plunging.
Key Takeaway
Even in an election year with economic uncertainty, quality stocks in essential sectors still hold up. Focus on durability—not headlines.
Final Thoughts
A recession in 2025 isn’t guaranteed, but preparing your portfolio for volatility is just smart investing. Whether you lean toward safe bets like Costco or scalable giants like Microsoft, the goal is the same: stability, growth potential, and peace of mind.
For more background on how past U.S. downturns have shaped markets, check out this deep dive on America’s worst economic crises.
External Resources
- Federal Reserve Economic Outlook – March 2025
- CNBC: Trump Proposes 60% Tariff on Chinese Goods
- Reuters: Market Reacts to Trump’s Economic Remarks
