Tech Stocks Stabilize as Dow Plunges on UnitedHealth Collapse

U.S. markets opened with a split performance on Thursday, as the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) clawed back early losses while the Dow Jones Industrial Average (^DJI) tumbled nearly 500 points. The divergence highlighted deepening sector rotations, with investors fleeing healthcare giant UnitedHealth Group (UNH) after a catastrophic earnings miss and pivoting toward select tech and energy names.

UnitedHealth’s $60 Billion Wipeout
The Dow’s 485-point drop at the open was driven almost entirely by UnitedHealth, which plummeted 17% in early trading, its worst single-day decline since the 2008 financial crisis. The health insurer slashed its annual profit forecast, citing unexpectedly high medical costs tied to an uptick in outpatient surgeries and Medicare Advantage claims. The stock’s $60 billion intraday market cap loss accounted for roughly 40% of the Dow’s total decline, a consequence of the index’s price-weighted structure.

While the Dow languished, the S&P 500 edged up 0.4% in futures trading before the bell, buoyed by a 7.83% surge in real estate stocks, the session’s top-performing sector. Energy names also gained traction, with Apache (APA) and Devon Energy (DVN) climbing 3.15% and 2.74%, respectively, as oil prices stabilized near six-month highs.

The Nasdaq, which closed Wednesday at a two-month low, found support from semiconductor stocks despite broad pressure. Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA) remained deep in the red, down 7.38% and 6.80% respectively, but buyers emerged in other corners of the tech universe. Eli Lilly (NASDAQ: LLY) and Taiwan Semiconductor Manufacturing Co. (NASDAQ: TSM) led early gainers, helping Nasdaq-100 futures rise 0.7%.

The CBOE Volatility Index (^VIX), Wall Street’s “fear gauge,” jumped 2.52% to 32.64, a level last seen during March’s banking stress. Traders grappled with conflicting signals: While UnitedHealth’s collapse signaled trouble for managed care providers like Humana (HUM) and Cigna (CI), stronger-than-expected results from TSMC and steady bond yields provided a floor for equities.

Despite Thursday’s partial recovery, all three major indexes remained on track for weekly losses. The Dow had already shed 2.24% over the past five sessions, while the S&P 500 and Nasdaq were down 3.36% and 4.78%, respectively, year-to-date. The selloff intensified after Federal Reserve Chair Jerome Powell acknowledged Wednesday that inflation progress had “stalled,” dashing hopes for near-term rate cuts.

As public markets churn, BlackRock’s latest annual report highlights a structural shift toward private investments. Over 81% of U.S. companies with $100 million+ revenue are now privately held, compared to just 19% listed on exchanges like the NYSE or Nasdaq. The asset manager’s Preqin acquisition aims to bring transparency to this opaque $10 trillion arena, mirroring the S&P 500’s role in standardizing public equity benchmarks.

Thursday’s action underscores the market’s fragile equilibrium: Bullish traders see value in oversold tech names, while bears target healthcare and consumer discretionary sectors. With earnings season accelerating and the Fed in a holding pattern, volatility is likely to remain elevated. All eyes now turn to Friday’s retail sales data, a key input for policymakers navigating the “last mile” of inflation control.

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