Investors squeezed progress in trade negotiations with Japan over concerns about the monetary policy outlook, and stock indexes mixed in Thursday’s incredible trading as United Health stocks weighed on the Dow.
The Dow Jones industrial average fell below 527 points (1.3%) to 39,142.23.
The S&P 500 rose 0.1%, while the Nasdaq fell 0.1%.
Ahead of the long weekend, all three major Wall Street Indexes fell to the third week in four, with the S&P 500 down about 1.5% after the best week since November 2023.
Investors found optimism in President Trump’s comments about “great progress” in trade talks with Japan after a sharp loss on Wednesday, but the early recovery quickly faded.
Meanwhile, UnitedHealth fell 22%, weighing the Blue Chip Dow after insurers lowered their annual profit forecasts on high annual healthcare costs expectations.
Other health insurance companies fell, with CVS health dropping by 1.8% and humana down 7.4%.
The focus will be on negotiation consultations with dozens of countries over the coming weeks to help clarify the size and scope of tariffs for individual countries and sectors.
“The (market) can change at any time… As far as tariffs go, everyone is guessing about what will happen,” says Tom Bruce, macro investment strategist at Tanggrowood Total Wealth Management.
Wall Street extended the losses on Wednesday after Federal Reserve Chairman Jerome Powell warned that Trump’s trade policies risk increasing inflation while weakening economic growth, adding that it needs to be more clear before adjusting the policy.
Trump fought back Thursday, calling on the central bank to cut interest rates in the true social post, saying that Powell’s end “can’t come fast enough.”
“Trump is known to be unhappy with Powell. The question is, is he trying to do anything about it,” Bruce said, adding that such a move would seriously undermine confidence in the US market.
Traders have reduced their May cut bets to around 10%, according to CME’s FedWatch, but Reuters polls show that economists are likely to have a US recession in the next 12 months.
However, that day, data showed weekly unemployment claims were lower than expected, suggesting that the labor market was stable.
Alphabet’s shares fell 1.4% after a federal judge determined that Google illegally controlled two markets due to online advertising technology.
Eli Lilly rose 14% after saying the experimental drugs resulted in nearly 8% weight loss and lowered blood sugar levels in type 2 diabetes patients.
Netflix shares rose 1.2% over the results after the closure bell.
