US stocks mostly gain, but UnitedHealth’s biggest drop in years holds Wall Street back

Most U.S. stocks went up on Thursday, but UnitedHealth Group experienced its worst drop in 25 years, which held Wall Street back.

The S&P 500 gained just 0.1%, despite three out of four stocks in the index rising. The Nasdaq composite fell by 0.1%, showing more stability after a significant drop the previous day.

The Dow Jones Industrial Average dropped by 527 points, or 1.3%, mainly because of one stock. UnitedHealth Group lost over 20% of its value, falling 22.4% after reporting weaker-than-expected profits.

Eli Lilly was one of the bright spots, rising 14.3% after the company shared positive results about a once-daily pill that may help treat obesity and diabetes.

Stocks in the oil and gas industry also rose as oil prices bounced back from sharp losses earlier in the month. Diamondback Energy increased by 5.7%, and Halliburton gained 5.1%.

Technology stocks held up better after Taiwan Semiconductor Manufacturing Co. reported profits for the quarter that met analysts’ expectations. The company also said it hasn’t seen any slowdown in activity from its customers, despite concerns about President Donald Trump’s trade war.

However, TSMC’s CFO Wendell Huang remained cautious, saying, “While we have not seen any changes in our customers’ behavior so far, uncertainties and risks from the potential impact from tariff policies exist.” TSMC’s U.S.-traded stock rose 0.1%.

These gains helped offset the big drop in UnitedHealth. The company reduced its forecast for the year after being surprised by how much medical care its Medicare Advantage customers were using, which was more than expected.

Nvidia also dragged the market down. Its stock fell 2.9% after announcing that new export restrictions on chips to China could hurt its first-quarter results by $5.5 billion.

At the end of the day, the S&P 500 added 7.00 points to 5,282.70. The Dow dropped 527.16 to 39,142.23, and the Nasdaq fell by 20.71 to 16,286.45.

Uncertainty about tariffs remains high. Trump wants to bring manufacturing jobs back to the U.S. and reduce the trade deficit. Economists are concerned that if the tariffs continue for too long, they could lead to a recession.

Trump suggested Thursday that talks with other countries could result in lower tariffs, which Wall Street hopes for.

However, the uncertainty about Trump’s inconsistent approach to tariffs may harm the economy on its own. On Wednesday, Federal Reserve Chair Jerome Powell said again that the tariffs appear to be larger than the Fed had expected, which could slow the economy and raise inflation more than previously thought.

This situation creates a dilemma for the Fed. It could cut interest rates to help the economy, but that would also push inflation higher. Powell said the Fed would wait to see how things unfold before deciding to change interest rates.

Trump criticized the Fed’s actions on Thursday, saying it is “always TOO LATE AND WRONG,” and added, “Powell’s termination cannot come fast enough!”

This criticism could worry investors. A Fed that can act without political influence is one of the main reasons the U.S. is seen as a safe place for investment. History shows that central banks with more independence tend to have more stable inflation.

Research suggests that Trump’s past calls for lower interest rates may have influenced financial markets’ expectations for lower rates, which could have affected the Fed. But the situation is different now compared to when inflation was low during Trump’s first term.

Francesco Bianchi, an economics professor at Johns Hopkins University, said, “This request for lower rates could backfire if markets perceive that going forward the Fed will be less committed to low and stable inflation.”

In the bond market, the yield on the 10-year Treasury rose to 4.32% from 4.29% late Wednesday. It had been falling for much of this week, recovering from last week’s sharp increase. That rise last week had raised concerns that Trump’s trade war might make investors lose confidence in U.S. investments as the safest option.

Economic reports released Thursday gave mixed signals. One showed fewer people applied for unemployment benefits than expected, indicating a strong job market. But another report revealed that manufacturing in the mid-Atlantic region unexpectedly shrank.

Stock markets in Europe saw losses, with indexes down 0.6% in France and 0.5% in Germany. The European Central Bank cut its main interest rate, a move that often boosts stocks, but investors had already anticipated it.

In Asia, stocks performed better. Markets rose 1.6% in Hong Kong and 1.3% in Japan.