Dow Faces Historic Divergence From S&P After UnitedHealth Plunge

The Dow Jones Industrial Average fell 1.2% Thursday, weighed down by a 18% plunge successful UnitedHealth aft the steadfast chopped its yearly forecast and reported its archetypal net miss successful much than a decade. The S&P 500 Index gained arsenic overmuch arsenic 0.6%.

It would marque for a strikingly uncommon divergence, if it lasts done the trading day. The lone time ever erstwhile the 30-member Dow closed 1% little oregon much portion the S&P 500 gained astatine slightest 0.5% was successful 1954, information compiled by Bloomberg show.

“Though the large indexes mostly determination together, today’s determination is that uncommon juncture erstwhile a high-priced banal successful the Dow Industrials makes an outsized determination that creates a divergence,” said Michael O’Rourke, main marketplace strategist astatine JonesTrading.

A cardinal quality betwixt the Dow and the broader S&P 500 is the methods utilized to value their constituent stocks. The Dow is price-weighted, meaning that changes successful the highest-priced stocks person greater interaction connected the scale level than terms changes successful the lower-priced stocks. The S&P 500, however, is market-cap-weighted.

Health insurer UnitedHealth Group, the top-weighted banal connected the Dow, tumbled the astir since 1999 aft reporting a first-quarter nett that fell abbreviated of analysts’ expectations. The institution besides lowered its net outlook for the year. The guidance chopped is uncommon for UnitedHealth, which typically forecasts conservatively and often raises its outlook arsenic the twelvemonth progresses.

It would beryllium rather the turnaround for the Dow, which has weathered this year’s marketplace turmoil amended than its 2 broader counterparts. As of Wednesday’s close, the Dow has fallen 6.8% this year, compared to the S&P 500’s 10% driblet and the tech-heavy Nasdaq 100’s 13% decline.

UnitedHealth is followed by Goldman Sachs Group Inc., Microsoft Corp. and Home Depot Inc. successful the Dow’s rankings, portion the S&P 500’s apical seats spell to tech behemoths Apple Inc., Microsoft, Nvidia Corp., Amazon.com Inc. and Meta Platforms Inc.

Meanwhile, the broader banal marketplace edged higher arsenic traders pore done the latest batch of net reports, trying to gauge the interaction of President Donald Trump’s tariff offensive.