If trade war sparks another sharp pullback, investors should resist the urge to sell, PNC's Jeff Mills says

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Investors should not panic over pullbacks sparked by trade war: PNC's Jeff Mills

PNC Financial's Jeffrey Mills warns that the trade war could give investors another scare.

However, he believes it's important to keep emotions in check and not to abandon long-term strategies.

"If it's one big sell-off or a couple of really bad days, investors ultimately assume that something is broken. And, you're more apt to try to sell," the firm's co-chief investment strategist told CNBC's "Futures Now" on Tuesday. "We don't think something is broken. We think the fundamentals are still largely intact."

The major indexes are on track for their worst month of 2019.

The Dow, which just saw its longest weekly losing streak in eight years, is down almost 5% this month. The S&P 500 is also struggling, off more than 5% off its record high hit on May 1.

The latest market volatility comes as interest rates fall. The 10-Year Treasury yield is trading at 20 month lows.

"That is going to factor into how the market behaves as well. We think interest rates are going to remain under pressure for some time," said Mills, who estimates the stock market could see another 4 to 5% decline from current levels.

'Interest rates are going to remain under pressure for some time'

Mills, who helps manage the firm's $130 billion in assets, expects defensive groups utilities, real estate and health care to continue doing well.

"To the extent that they're vulnerable to rapidly rising rates, I don't think that's in the cards," he said. "You probably see that leadership continue as long as growth remains slow and the trade war remains in play."

But they're not his top play in this challenged environment. Mills' latest strategy has him turning to a region battered by the trade war: emerging markets.

"After the 10 to 12% sell-off we've seen over the last couple of months, last week we actually moved portfolios back into emerging markets from underweight back to neutral," Mills said. "There's some opportunity there."