The Dow Jones Industrial Average (DJIA) experienced a significant decline, plummeting over 500 points (1.30%) on Thursday, primarily driven by a sharp downturn in UnitedHealth Group (UNH) shares. UNH’s stock price plummeted by 23% following a disappointing earnings report and a revised, less optimistic full-year forecast, negatively impacting the healthcare sector. The DJIA subsequently fell below 39,500.
President Trump reiterated his criticism of Federal Reserve Chair Jerome Powell, citing the Fed’s perceived delay in implementing interest rate cuts. He contrasted this with the European Central Bank’s (ECB) recent rate reduction, asserting that the Fed is “too late” in easing monetary policy. Trump’s comments followed Powell’s remarks in Chicago, where the Fed Chair emphasized the ongoing focus on managing inflation. Powell acknowledged the increasing complexity of balancing the Fed’s dual mandate of price stability and full employment, raising concerns about potential stagflation. Market expectations for a May rate cut have diminished, with current pricing indicating only a 9% probability.
Economic data presented a mixed picture. Initial Jobless Claims for April 12 indicated a robust labor market. Housing data was similarly varied, with Building Permits showing an increase in construction plans, while Housing Starts revealed a slowdown in actual home construction.
President Trump expressed confidence in securing trade agreements with the European Union (EU) and China.
Technically, the Dow Jones exhibits a bearish bias, having breached the 39,000 level. A sustained move above 39,984 could signal a potential consolidation phase between 39,000 and 40,000, with subsequent targets at 40,500, 40,909, and 41,000. Conversely, a break below 39,000 would likely lead to a test of the April 10 low of 38,431.
