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On Thursday, stock markets experienced a generally positive trend, despite a critical statement from President Donald Trump regarding Federal Reserve Chair Jerome Powell, whom he labeled “too late and wrong.” This commentary came ahead of the stock market’s opening and coincided with disappointing economic indicators.
In a pre-dawn post on Truth Social, President Trump compared Powell unfavorably with the European Central Bank (ECB), which is anticipated to implement its seventh interest rate cut. He referred to Powell’s address to the Economic Club of Chicago, where the Fed chair expressed concerns over a slowing economy and the risk of rising inflation, as “a report which was another, and typical, complete ‘mess!’” Trump concluded his post by asserting that Powell’s “termination cannot come fast enough!”
Market Reactions to Powell’s Remarks
Investor sentiment took a negative turn following Powell’s comments during a Q&A session. He stressed that while markets are reacting as expected, the Federal Reserve will not make impulsive decisions based solely on stock market fluctuations. Powell noted that the current economic landscape shows a drift away from the Fed’s dual mandate focused on price stability and full employment, but he maintained that the central bank is poised to await further clarity amid growing uncertainties linked to tariffs.
Trump advocates for immediate interest rate reductions and likely anticipates some form of intervention from the Fed. As of mid-April, futures prices for federal funds indicated a 93.8% likelihood that the Federal Open Market Committee would maintain the current rate range of 4.25% to 4.50% through June, which is a notable increase from 85.3% a day earlier. The next Fed meeting is scheduled for May 6-7.
It’s important to note that both the stock and bond markets will be closed in observance of Good Friday.
By the end of the day, the Dow Jones Industrial Average fell by 1.3% to 39,142, while the S&P 500 saw a slight uptick of 0.1% to 5,282, and the Nasdaq Composite decreased by 0.1% to 16,286.
Recent Economic Data Draws Attention
The Department of Labor reported a decrease in initial jobless claims by 9,000, bringing the total to 215,000 for the week ending April 12, which was below the expected figure of 225,000 and represented the lowest level since mid-February. The four-week moving average also dipped, but continuing claims rose slightly to 1.89 million, above the anticipated 1.87 million.
BMO Capital Markets senior economist Priscilla Thiagamoorthy noted that applications for unemployment benefits filed by federal workers remained subdued after a spike earlier in the year, aligning with Powell’s assessment that the labor market appears stable.
Meanwhile, data from the Census Bureau revealed that housing starts declined by 11.4% in March, totaling 1.32 million, falling short of forecasts. Conversely, building permits increased by 1.6% to 1.48 million after three consecutive months of declines. Additionally, the Philadelphia Fed Manufacturing Index significantly dropped by 38.9 points, reaching -26.4 in April, marking a two-year low.
“Overall,” Thiagamoorthy commented, “the figures suggest that residential construction might continue to face challenges, reflecting both demand and supply issues.” However, she emphasized that there were no substantial indicators of labor market deterioration, which, combined with potential inflationary pressures, is likely causing the Fed to remain cautious.
Significant Stock Movement: UnitedHealth Group
UnitedHealth Group (UNH) experienced a staggering decline of 22.4%, marking its largest single-day drop in nearly 27 years, after failing to meet earnings expectations and revising its full-year guidance downward. This steep drop was reminiscent of its 28.4% fall on August 6, 1998.
For the first quarter, UnitedHealth reported earnings of $7.20 per share, slightly below the consensus estimate of $7.29. Additionally, the reported revenue of $109.6 billion fell short of the expected $111.6 billion. The company’s forecasts for earnings per share have been adjusted to $26 to $26.50, down from a prior projection of $29.50 to $30 made in December.
UnitedHealth’s management linked the missed expectations to increased care activity within its Medicare Advantage segment, citing higher-than-anticipated utilization rates for physician and outpatient services, coupled with ongoing Medicare funding cuts initiated by the current administration.
Louis Navellier of Navellier & Associates noted, “The Dow is primarily being affected by one major stock: UnitedHealthcare.” He emphasized that the significant drop in UNH is adversely impacting the health insurance sector and is significantly dragging the Dow down. The Dow’s calculation method gives greater weight to higher-priced shares, making UnitedHealth’s closing price of $585.04 prior to the drop influential on the index’s overall performance.
As a result, UNH stock is now down 10.2% in just 2025 and has declined 7.9% over the past twelve months.
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