Stock indexes were mixed in choppy trading on Thursday as investors weighed progress in trade negotiations with Japan against concerns about the monetary policy outlook, while a slump in UnitedHealth’s shares weighed on the Dow.
The Dow Jones Industrial Average tumbled 527 points, or 1.3%, to 39,142.23.
The S&P 500 rose 0.1%, and the Nasdaq edged down 0.1%.
Ahead of the long weekend, all three major Wall Street indexes posted their third weekly decline in four, with the S&P 500 losing about 1.5% after its best week since November 2023.
Investors found some optimism from President Trump’s comments on “big progress” in trade talks with Japan after steep losses on Wednesday, but an early recovery quickly fizzled out.
Meanwhile, UnitedHealth plunged 22% and weighed on the blue-chip Dow after the insurer lowered its annual profit forecast on expectations of high medical costs for the rest of the year.
Other health insurers slumped, with CVS Health down 1.8% and Humana falling 7.4%.
Focus will be on negotiation talks with dozens of countries over the coming weeks for more clarity on the size and scope of tariffs on individual nations and sectors.
“(The market) could change at any moment … everyone’s guessing right now as to what’s going to transpire as far as tariffs are concerned,” said Tom Bruce, macro investment strategist at Tanglewood Total Wealth Management.
Wall Street had extended losses on Wednesday after Federal Reserve Chair Jerome Powell warned Trump’s trade policies risked pushing inflation higher while weakening economic growth, adding policymakers needed more clarity before adjusting policy.
Trump hit back on Thursday, saying in a Truth Social post that Powell’s termination “cannot come fast enough” and calling for the central bank to cut interest rates.
“It’s been known that Trump hasn’t been happy with Powell … the question is, does he attempt to do anything about it,” Bruce said, adding that such a move would severely damage confidence in US markets.
Traders have scaled back bets of a May rate cut to about 10%, according to CME’s FedWatch, while a Reuters poll showed economists see a higher probability of a US recession in the next 12 months.
On the day, however, data showed weekly jobless claims came in lower than expected, suggesting the labor market remains stable.
Alphabet’s shares dropped 1.4% after a federal judge ruled Google illegally dominated two markets for online advertising technology.
Eli Lilly rose 14% after the drugmaker said its experimental pill led to weight loss of nearly 8% and lowered blood sugar in type 2 diabetes patients.
Netflix shares rose 1.2% ahead of results after the closing bell.