The Dow Jones Industrial Average (DJI) dropped 527.16 points on Thursday to close at 39,142.23 (1.33%) of its value. During the session, the index ranged between 38,950.31 and 39,745.58. This sharp fall followed UnitedHealth’s disappointing earnings and weaker guidance, which pulled the Dow down by as much as 719 points at one stage.
UnitedHealth (UNH) shares crashed nearly 23% after it reported adjusted Q1 earnings of $7.20 per share on $109.58 billion revenue. Both metrics missed expectations. The company also lowered its full-year earnings forecast, sparking a selloff in healthcare stocks. The iShares US Healthcare Providers ETF plunged more than 6%, marking its worst session since June 2020.
In contrast, the S&P 500 edged up 0.1% while the Nasdaq dipped 0.1%. Both indices showed volatility but avoided major losses. The divergence was due to the Dow’s price-weighted nature, which made it highly sensitive to UnitedHealth’s steep drop.
Market sentiment remained weak due to trade concerns. President Donald Trump stated that deals with China and the EU might be close. However, investors remained cautious. Since Trump’s tariff announcement on April 2, the Dow and S&P 500 have each fallen over 6%, while the Nasdaq lost about 7%.
The Dow is calculated using a divisor, currently near 0.163. This means every $1 price move in a Dow stock shifts the index by about 6.1 points. UnitedHealth’s drop significantly impacted the index’s Thursday performance.
IMF Warning Adds to Economic Uncertainty
International Monetary Fund Managing Director Kristalina Georgieva issued a warning on Thursday. She said Trump’s tariffs will raise global inflation and slow growth in 2025. However, the IMF does not expect a global recession.
Georgieva cautioned that prolonged uncertainty would raise financial market stress. She added that recent U.S. bond yield increases and the weakening dollar are signs of caution.
According to her, tariffs act like a tax, hurting businesses and consumers. She noted that importers lose profits while consumers face higher prices. Global supply chains face disruption, and planning becomes difficult.
Georgieva emphasized that strong central bank independence is key to controlling inflation. She urged global leaders to support fair and open trade at the upcoming international summit.
Technical Analysis: Key Supports in Play
The Dow formed a double-top pattern, peaking at 45,078. This marked a reversal signal, and the index has since trended lower. It continues to make lower highs and lower lows.
The current price is 39,231.10, sitting just above a double-support zone between 36,900 and 37,200. This level is formed by both horizontal and ascending trendline support. The index is trading below the 50, 100, and 200-day moving averages, which confirms a bearish bias.
If the price breaks below the 36,900 area, the next likely support sits at 32,800. However, if support holds, the index may stage a rebound toward 41,000 and possibly re-test the 45,078 high.
Technical analysis highlights two scenarios. A break below support could extend the downtrend, targeting 32,000. On the upside, a strong bounce could spark a recovery toward recent highs. Current momentum remains weak, and confirmation is needed for any reversal.
Thoughts Ahead?
The Dow remains under pressure following Thursday’s steep drop. UnitedHealth’s collapse weighed heavily on sentiment. Tariff uncertainty continues to dominate headlines.
The index is currently down 2% for the week. The S&P 500 is lower by almost 1%, while the Nasdaq has lost 2%. Investors await updates on trade talks next week.
With price still under key averages and facing macro headwinds, the Dow’s trend remains bearish. The market could turn if support holds and positive trade developments emerge. Until then, volatility and bearish momentum are likely to persist.
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