The markets were closed on Monday in observance of President's Day. During the first half of the week, the S&P 500 reached a new record high of 6,147. This was driven by a strong resistance to selling interest and a tendency to buy during market weaknesses. However, by the end of the week, a consolidation trade emerged due to profit-taking activities. Concerns over valuations and a slowdown in momentum among top-performing stocks contributed to this trend, sparking discussions about a potential near-term market top. This sentiment reduced buying interest.
These economic indicators, coupled with disappointing fiscal Q1 and full-year guidance from Walmart (WMT), contributed to increased selling interest later in the week.
Mega cap and small cap stocks experienced the most significant declines, while the broader market fared relatively better. The market-cap weighted S&P 500 fell by 1.7% from the previous Friday, while the equal-weighted S&P 500 saw a 0.7% decline. The Russell 2000 dropped by 3.7%, and the Vanguard Mega Cap Growth ETF (MGK) recorded a 2.7% decline.
Market participants considered tariff discussions, viewing them as bargaining tools rather than permanent measures. President Trump announced a 25% auto tariff starting April 2 and mentioned potential tariffs for pharmaceuticals and semiconductors.
Tuesday was mostly uneventful until the final minutes of trading. The S&P 500 reached a new record high of 6,129 due to a late surge in buying interest. The Dow Jones Industrial Average and the Nasdaq Composite also closed slightly higher. The positive bias beneath the index surface acted as an upside catalyst, encouraging more buying towards the end of the day.
Wednesday's session mirrored Tuesday's, with indices trading around prior closing levels before the S&P 500 hit another record high. Profit-taking activities were present, but resilience to selling interest turned into an upside catalyst by the session's end. Mega cap and semiconductor stocks played a key role in the index gains.
Thursday saw a negative bias following Wednesday's S&P 500 record high, with indices opening sharply lower due to consolidation and profit-taking. However, a steady recovery in the afternoon indicated a continued inclination to buy on weakness. Walmart (WMT) was the worst-performing stock in the Dow Jones Industrial Average and S&P 500 consumer staples sector, influenced by disappointing fiscal guidance.
Friday witnessed sharp declines in a broad-based retreat on high-volume options expiration day. Major indices closed near their lowest levels, with the S&P 500 ending just above its 50-day moving average at 6,010, down 1.7%. Concerns about growth and valuations fueled consolidation and profit-taking. UnitedHealth (UNH, Financial) shares fell following a Wall Street Journal report on a DOJ civil fraud investigation into its Medicare Advantage billing practices.
Private Capital has made the following transactions:
Ron Baron has made the following transactions:
UnitedHealth (UNH, Financial) shares fell significantly following news of a U.S. Department of Justice investigation into the company's billing practices for Medicare Advantage. The probe, which includes the Office of Inspector General, scrutinizes potential fraudulent diagnoses that could lead to increased payments. Despite the company's denial of the allegations, the stock experienced its largest intraday drop since March 2020, although analysts from Oppenheimer and Mizuho suggest the financial impact may be minimal.
Novo Nordisk (NVO) announced that the shortage of its popular diabetes and weight loss drugs, Ozempic and Wegovy, has ended. This update negatively impacted Hims & Hers Health (HIMS, Financial), which had been producing compounded versions of these medications during the shortage. With the supply constraints resolved, Hims & Hers will no longer be able to manufacture these compounded drugs, affecting its market position.
Celsius Holdings (CELH, Financial) made headlines with its $1.8 billion acquisition of Alani Lu, a move seen as strategically sound to enhance growth and scale in the energy drink market. The acquisition is expected to strengthen Celsius' position among female consumers, a demographic that has been increasingly consuming energy drinks.
Trucking stocks, including Old Dominion (ODFL, Financial) and Saia (SAIA, Financial), faced pressure as J.P. Morgan warned of potential market share loss if Amazon (AMZN) enters the less-than-truckload sector as a competitor. TFI International's CEO highlighted ongoing challenges in the freight industry, predicting a tough environment for the first half of 2025.
Viking Therapeutics (VKTX, Financial) shares surged on renewed takeover speculation, with Pfizer (PFE) rumored to be interested. This follows previous reports of Eli Lilly's (LLY) potential interest in acquiring the obesity drug maker, which has seen its market cap rise to $3.5 billion.
Kenvue (KVUE) saw a modest gain amid speculation of takeover interest from companies like Procter & Gamble (PG) or Unilever (UL). The company is currently involved in a proxy battle with activist investor Starboard Value, which has pushed for changes to enhance the stock's performance.
AMD (AMD) is reportedly in talks to sell server chip manufacturing plants in Asia, potentially valued at $4 billion. The sale would include plants acquired through its purchase of ZT Systems, aiming to boost its data center AI systems capabilities.
Rivian Automotive (RIVN) announced a recall of over 17,000 vehicles due to a headlight issue affecting visibility. The recall covers specific models that may have been built with improperly configured parts, and the company will replace the headlight control modules at no charge.
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