As the economic recovery from Covid-19 has progressed this year, investors have had plenty of opportunities to place winning bets. Wagering against the bull run in stocks hasn’t been one of them. What’s happening: The S&P 500 and the Nasdaq Composite both closed at all-time highs on Monday after shares of Apple\n \n (AAPL), Google owner Alphabet\n \n (GOOGL), Facebook\n \n (FB) and Nvidia\n \n (NVDA) all hit new records. But even as tech stocks continue their dizzying ascent, some on Wall Street have decided it’s time to play defense. Exchange-traded funds tracking traditionally “defensive” sectors — health care, utilities and real estate — outperformed in July and August. The Health Care Select Sector SPDR Fund\n \n (XLV) is up 7.5% so far this quarter, while the broader S&P 500 has risen 5.4%. The iShares US Utilities ETF\n \n (IDU) has climbed 7.7%, while the iShares US Real Estate ETF\n \n (IYR) has increased 6.2%. Companies that produce consumer staples, which also get a boost when investors turn defensive, have notched more muted gains. The Consumer Staples Select Sector SPDR Fund has risen 3% in July and August. Bank of America’s global fund manager survey published earlier this month noted this “more defensive” tilt. Health care was the top sector among fund managers for the first time since November 2020. What it means: As the contagious Delta variant of Covid-19 casts a haze over the economy, some investors may be getting nervous and thinking about how to protect their profits. There are also signs that the global growth is losing some momentum. China’s economy stalled in August, according to an official survey released Tuesday. Manufacturing activity fell to 50.1 in August from 50.4 in July. That was just above the 50-point mark indicating expansion rather than contraction, but still the slowest rate of growth since the start of the pandemic. Service industries, which now account for a larger slice of the world’s second biggest economy, fared even worse. The non-manufacturing Purchasing Managers’ Index plunged to 47.5 from 53.3 in July, the first contraction since February 2020. Investors aren’t just watching China. In late July, Goldman Sachs slashed its forecast for US economic activity in the second half of the year, pointing to sluggish consumer spending on services as well as the threat posed by the Delta strain. (Not to mention inflation and what the Federal Reserve does next.) Step back: LPL Financial’s Ryan Detrick noted to clients this week that the S&P 500 hasn’t had a 5% pullback once this year. This usually happens three times a year on average. It’s no surprise, then, that at this point in the rally — with risks on the horizon — some on Wall Street are turning cautious. Travel stocks fall as Europe drops US travelers from safe list The European Union recommended Monday that Americans should be banned from nonessential travel to its member states after a rise in Covid-19 cases in the United States — hitting shares of airlines that have been benefiting from the gradual return of transatlantic travel. The details: Countries within the 27-nation bloc, which includes France, Italy and Germany, have been advised to reinstate coronavirus-related restrictions and halt the arrival of tourists from the United States and five other countries. The guidance isn’t binding, leaving the final decision up to each individual EU country. But it’s a blow to companies that had been planning for a more sustainable return to travel on the heels of vaccination campaigns. The move could also have a negative impact on tourism-dependent economies in the bloc, including Spain and Portugal. Investor insight: US airline stocks fell Monday. Shares of United Airlines\n \n (UAL) fell 3.8%, while American Airlines\n \n (AAL) dropped 3.5% and Delta Air Lines\n \n (DAL) shed 3.9%. “United has worked closely with the EU and governing bodies around the world throughout the pandemic to safely reopen travel,” the airline said in a statement. “We’ll continue to monitor how member states respond to this new guidance and keep our customers informed about any changes to their travel plans.” European airlines also took a hit Tuesday. British Airways parent IAG’s stock dipped 3.7% in early trading in London, while budget carriers EasyJet\n \n (ESYJY) and Ryanair\n \n (RYAAY) lost 2.2% and 3.1%, respectively. Air France KLM’s stock dropped 1.2% in Paris. Is the Zoom era coming to an end? Since the start of the pandemic, video conferencing has become an integral part of millions of lives around the world. And the name of one business has been synonymous with the boom: Zoom. But the company’s latest earnings report, which posted after US markets closed Monday, signals that the newly-minted Zoom generation may be getting weary of all the screen time. The scoop: Zoom Video\n \n (ZM) reported revenue of more than $1 billion for the first time in the second quarter, logging a 54% year-over-year increase. But it warned that a slowdown in demand was coming as some workers head back to the office and business travel resumes. “We feel good that people are out moving around the world, but it’s certainly creating some headwinds, as we said, in the online segment of our business,” Kelly Steckelberg, the company’s chief financial officer, said on a call with analysts. This easing of demand is happening “a little bit more quickly than we expected,” she added. Shares are off 12% in premarket trading on Tuesday. Zooming out: The ubiquity of Zoom over the past 18 months has sent its stock soaring. Shares have gained more than 400% since the beginning of 2020. But despite the spread of the Delta variant, a growing desire for a (modified) return to normal will make that trajectory very hard to sustain. Up next NetEase\n \n (NTES) reports results before US markets open. CrowdStrike\n \n (CRWD) follows after the close. Also today: US consumer confidence data for August posts at 10 a.m. ET. Coming tomorrow: The latest ADP private employment report is a crucial preview of the official government jobs report due Friday.