The S&P 500 declined by 0.2% on Thursday, January 16, 2025, reversing some of its recent gains from the day before. This dip followed a strong rally fueled by positive earnings reports and optimism about inflation data. Major U.S. stock indexes ended lower, with the Dow also dropping by 0.2%, and the Nasdaq Composite falling 0.9%.
UnitedHealth Faces Setback
Shares of UnitedHealth Group (UNH) took a significant hit, dropping 6.0%—the largest loss on the S&P 500 for the day. The health insurance giant’s results fell short of expectations. Despite posting higher-than-expected profits, UnitedHealth’s revenue was lower than forecast. The company’s rising medical costs were also a factor, pushing its medical cost ratio (the proportion of revenue spent on medical expenses) higher year-over-year.
This comes after UnitedHealth’s first earnings report following the tragic death of Brian Thompson, head of its insurance unit, last month.
US Bancorp and Texas Instruments Struggle
US Bancorp (USB) saw a 5.6% drop in its stock price. Although the financial services company beat profit expectations, it reported weaker-than-expected results in a key metric: net interest margin, which measures a bank’s ability to earn money from its lending activities.
Texas Instruments (TXN) also faced pressure, with its shares falling 5.1%. The company’s stock drop was linked to reports that China’s Commerce Ministry is investigating U.S. subsidies for chipmakers. This probe could potentially challenge Texas Instruments’ competitive standing in the Chinese market, especially in semiconductors like power and analog chips.
Dexcom Sees Gains Amid Positive Outlook
In contrast, shares of Dexcom (DXCM), a medical device maker known for its glucose-monitoring systems for diabetics, rose by 5.5%. The stock’s surge came after analysts from Piper Sandler pointed out strong potential growth factors for the company. This includes the approval for reimbursement for 5 million type 2 diabetes patients who do not use insulin, as well as positive forecasts for its durable medical equipment (DME) business. Additionally, Baird analysts raised their price target for Dexcom, citing improved salesforce productivity and growth prospects in the U.S.
Estee Lauder Gains on Price Target Upgrade
Estee Lauder (EL) saw a 4.8% increase in its stock after JPMorgan upgraded its price target. The analysts expect significant insights into consumer behavior, tariff risks, and economic factors during the ongoing earnings season, which could impact the company’s performance in 2025.
Semiconductor Equipment Stocks See Growth
Shares in semiconductor equipment makers experienced positive movement. Taiwan Semiconductor Manufacturing Co. (TSM) announced strong profit guidance for the fourth quarter, citing increased demand for artificial intelligence (AI) technologies. This outlook benefited companies like Applied Materials (AMAT), KLA Corp. (KLAC), and Lam Research (LRCX), which saw their stock prices rise by 4.5%, 4.3%, and 4.0%, respectively. However, the semiconductor industry is also facing challenges as the Netherlands enforces stricter export regulations that may affect the sector.
Conclusion
Thursday’s market performance highlighted a mixed picture for U.S. equities, with some major companies struggling, while others, especially in the medical device and semiconductor sectors, saw positive gains. Despite a decline in major indexes, investor sentiment remains influenced by ongoing corporate earnings reports and economic outlooks for 2025.
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