On Thursday, the U.S. stock market witnessed mixed movements. Although there was a broad uptrend, a significant loss by UnitedHealth Group kept major indices in the balance. The S&P 500 managed a slight increase of 0.1%, even as the majority of its stocks saw upward traction. Meanwhile, the Nasdaq composite experienced a small dip of 0.1% after the previous day’s turmoil.
The Dow Jones Industrial Average fell by 527 points, about 1.3%, primarily driven by UnitedHealth Group’s situation. The company suffered a dramatic 22.4% drop — its steepest in 25 years — after releasing a disappointing profit report.
Despite the drag from healthcare, other sectors led gains. Notably, Eli Lilly’s shares surged by 14.3% due to promising results from their potential obesity and diabetes treatment pill. Energy stocks also rallied as crude oil prices rebounded, with Diamondback Energy up by 5.7% and Halliburton by 5.1%.
In the tech sector, Taiwan Semiconductor Manufacturing Co. (TSMC) reported quarter results that met forecasts, reassuring investors about ongoing customer demand despite global trade tensions. However, TSMC expressed caution over lingering uncertainties related to tariffs. Its U.S.-listed shares saw a marginal rise of 0.1%.
UnitedHealth’s fall was compounded by its lowered annual financial forecast, unexpectedly impacted by increased service demand from Medicare Advantage clients. Additionally, Nvidia faced its second consecutive day of losses, dropping 2.9%, amid concerns over export restrictions to China that might impact its financial outcomes.
By day’s end, the S&P 500 closed with a minor gain of 7.00 points to reach 5,282.70. Conversely, the Dow Jones sank 527.16 points to 39,142.23, while the Nasdaq dipped slightly by 20.71 points to 16,286.45.
Elsewhere, uncertainty persisted over President Trump’s tariffs intended to foster domestic manufacturing and correct trade imbalances. Such moves have raised fears of a potential recession. Nevertheless, Trump hinted at possible reductions in tariffs through negotiations, which investors are closely monitoring.
The volatility surrounding tariff policies poses a risk to economic stability. Remarks by Federal Reserve Chair Jerome Powell on the unexpected magnitude of these tariffs added to market concerns, particularly around possible economic slowdowns and inflation hikes. The Fed continues to adopt a wait-and-see approach regarding potential interest rate adjustments.
President Trump voiced disapproval of the Fed’s stance, critiquing its response times and suggesting leadership changes. Such comments toward the Fed can affect investor sentiment, as an autonomous central bank is deemed essential for a stable investment environment.
Research indicates that Trump’s advocacy for lower interest rates may have previously influenced market expectations. However, current economic conditions differ from those early in his presidency.
“In the current climate, pushing for lower rates might undermine the perception of the Fed’s commitment to controlling inflation,” stated Francesco Bianchi, an economics professor at Johns Hopkins University.
The bond market saw a slight increase in the yield on 10-year Treasury notes, reaching 4.32% from 4.29%, reflecting ongoing fluctuations following the previous week’s concerns over investor confidence in U.S. assets.
Economic data released Thursday showed mixed signals: a dip in unemployment benefit claims hinted at a resilient job market, while manufacturing activity in the mid-Atlantic unexpectedly contracted.
In international markets, European indices slipped by 0.6% in France and 0.5% in Germany. However, recent decisions by the European Central Bank to cut interest rates did not lead to significant market reactions, as such actions were anticipated.
Contrastingly, Asian markets performed well, with Hong Kong’s stocks up by 1.6% and Japan’s climbing 1.3%.