On Thursday, Wall Street ended with mixed results as investors weighed optimism surrounding U.S. trade negotiations and concerns about the outlook for interest rates. The market was influenced by President Trump’s comments about “big progress” in trade talks with Japan, as well as his comments on a possible trade deal with China. However, the session ended with uncertainty as the S&P 500 pared its gains and the Nasdaq turned negative, indicating wariness among traders heading into the long weekend.
Eli Lilly saw a remarkable 14% surge after announcing that its experimental diabetes pill performed similarly to the well-known drug Ozempic, boosting investor confidence. Apple also climbed 1.4%, recovering somewhat from recent declines in its stock price. However, UnitedHealth faced significant losses, dropping 22%, after it lowered its annual profit forecast, citing higher-than-expected medical costs for the remainder of the year. Other health insurers also saw their shares fall, with Humana down 7.4% and CVS Health down nearly 2%.
Fear & Greed Index:
Neutral – The market remains divided, with optimism regarding trade talks balanced against concerns about inflation and slower growth. Investors remain cautious, particularly heading into the long weekend.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: -1.33% at 39,142.23
- S&P 500: +0.13% at 5,282.70
- Nasdaq Composite: -0.13% at 16,286.45
Sector Performance:
Winners:
- Energy: The energy sector led the way with a 2.3% gain, driven by rising oil prices and continued investor confidence in the sector.
- Consumer Staples: The sector rose 2.2%, bolstered by defensive stocks amid market volatility.
Losers:
- Healthcare: UnitedHealth’s 22% plunge weighed heavily on the healthcare sector, with other health insurers like CVS Health and Humana also posting losses.
- Technology: Alphabet’s stock dropped 1.4% after a judge ruled that Google had illegally dominated online advertising markets.
Key Movers:
- Eli Lilly (LLY): Rose 14% after announcing promising results for its experimental diabetes pill, boosting its stock significantly.
- Apple (AAPL): Gained 1.4% as the tech giant recovers from recent losses in its iPhone sales.
- UnitedHealth (UNH): Fell 22% after lowering its profit forecast for the year, citing higher medical costs.
- Humana (HUM): Dropped 7.4%, following the downward revision of earnings forecasts in the healthcare sector.
Economic Data:
- Unemployment Benefits: Data released on Thursday showed that the number of Americans filing for unemployment benefits fell last week, suggesting stable labor market conditions in April despite concerns over trade uncertainty.
- Tariffs and Trade Negotiations: The ongoing trade negotiations with Japan and China are central to market sentiment. Trump’s comments about “big progress” in talks provided a boost, although traders are still awaiting tangible outcomes.
Outlook:
U.S. stocks have been under pressure in recent weeks due to Trump’s fluctuating tariffs and trade policies, with the market having declined for three of the last four weeks. While there is optimism surrounding trade talks with Japan, concerns over the broader trade conflict with China and its impact on inflation continue to weigh on investor sentiment.
The market is closely watching the Federal Reserve’s stance on interest rates, with traders now scaling back expectations of a May rate cut, and many economists predicting a higher probability of a U.S. recession in the next 12 months. The upcoming earnings season and further developments in the trade talks will likely drive market sentiment over the coming weeks.