UnitedHealth Plummets and Fed Concerns Cause Dow to Drop Over 500 Points
U.S. markets closed on a mixed note on Thursday, primarily influenced by significant declines in UnitedHealth, which dragged the Dow down.
Markets reacted to ongoing trade disputes and conveyed messages from the Federal Reserve indicating that interest rate reductions may not be forthcoming. The Dow Jones Industrial Average dipped 1.2%, equivalent to around 500 points, mainly due to a dramatic 23% drop in UnitedHealth’s stock after the company revised its full-year profit expectations downward.
Meanwhile, the S&P 500 gained 0.2%, supported by increases in certain sectors, while the tech-focused Nasdaq Composite saw a slight decline of approximately 0.13%. Nvidia experienced a second consecutive day of losses as the U.S. intensified chip sale restrictions to China.
Trump vs. Powell
The focus of the market remained on Fed Chair Jerome Powell, who cautioned on Wednesday that rising tariffs could hinder growth and contribute to higher inflation.
Powell stated that the Fed would await further clarity regarding trade policies before making any rate decisions, which tempered anticipations for prompt rate cuts.
In response, President Trump escalated his criticism of Powell, implying that the Fed chair’s “termination cannot come fast enough” and reportedly mentioned possible candidates for his replacement.
Additionally, there were reports indicating that Trump had consulted with former Fed governor Kevin Warsh as a potential successor to Powell, adding to the uncertainty in the market.
On a different note, chip manufacturer TSMC exceeded expectations with a staggering 60% increase in Q1 net profit, driven largely by demand for AI chips. Investors are also looking forward to Netflix’s earnings, regarded as a bright spot for technology amidst broader sector weaknesses.
Yields on 10-year Treasury notes rose to 4.325%, while the U.S. dollar saw a modest increase.
Note that both stock and bond markets will be closed this Friday in observance of Good Friday.
Bitcoin (BTC) briefly traded above $85,000 but stabilized around the $84,600 mark at the time of this report.
