Midstream fundamentals vs tariffs and market turmoil

Recent market volatility, driven by U.S. tariffs, has led to significant declines in equity markets, with energy equities particularly affected. However, midstream equities have shown resilience, continuing to outperform broader markets despite recent pullbacks. This is largely due to the sector's strong ties to natural gas services, which remain robust against tariff impacts and benefit from rising domestic demand for liquefied natural gas exports and natural gas-fueled electricity generation.

The growth in LNG export facilities under long-term contracts shields the sector from immediate trade tensions while supporting a stable outlook for cash flow and distribution growth. Additionally, any potential increase in onshoring manufacturing could further enhance domestic power demand.

In light of these factors, investors may find compelling opportunities within the midstream sector due to its attractive yields and promising fundamentals amidst ongoing market uncertainties.