A Stock Prevented the Dow From Having an Even Better Week

Wall Street wrapped up the week with impressive gains, largely driven by optimism surrounding the recent U.S.-China tariff truce. Most major stock indexes saw broad-based advances, with investors cheering signs of easing trade tensions. However, the overall market rally would have looked even stronger if not for the poor performance of one major stock: UnitedHealth Group.

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The health insurance behemoth saw its shares plunge more than 23% this week, erasing billions in market value and weighing heavily on the Dow Jones Industrial Average. The drop followed a series of troubling headlines that shook investor confidence. On Tuesday, UnitedHealth withdrew its financial guidance for 2025 and announced that its CEO, Andrew Witty, would be stepping down.

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The very next day, The Wall Street Journal reported that the company is potentially facing a Department of Justice investigation related to alleged Medicare fraud. UnitedHealth responded by saying it had not received any formal notice of such a probe.

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Because the Dow is a price-weighted index—meaning that stocks with higher share prices have a greater influence on the average—UnitedHealth’s steep decline had an outsized effect. Despite the dramatic fall, UnitedHealth still remains one of the higher-priced stocks in the index, ranking ninth overall. As a result, the decline in its share price sliced approximately 545 points off the Dow’s total this week.

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To put that in perspective, if UnitedHealth’s stock price had remained unchanged over the week, the Dow would have closed above 43,000 on Friday—about 1.3% higher than its actual finish. In short, the broader rally in equities was partially masked by UnitedHealth’s poor performance.

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The drag effect isn’t new. According to Bespoke Investment Group, UnitedHealth has already been weighing on the Dow’s performance in recent months. In a social media post on X, Bespoke noted that the Dow would be 4.6% higher over the past six months if UnitedHealth were excluded from the index.

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While UnitedHealth’s influence on the Dow was particularly pronounced, the broader market felt a smaller ripple effect. The stock remains a top-40 holding in the S&P 500 as tracked by the SPDR S&P 500 ETF Trust (SPY), but its weight in that fund is less than 1%. Since the S&P 500 is market-cap weighted—giving larger companies proportionally more influence—UnitedHealth’s dip had a relatively minor effect on that benchmark.

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Still, there was one silver lining for beleaguered UnitedHealth shareholders. Several members of the company’s board of directors stepped in to purchase shares during the downturn. Though the share purchases were modest in size, they sent a signal to the market that insiders remain confident in the company’s long-term prospects. That vote of confidence helped spark a rebound in the stock price, which rose more than 6% on Friday.

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Analysts also weighed in on the potential for recovery. Morgan Stanley’s Erin Wright acknowledged the uncertainty but struck a cautiously optimistic tone in a note to clients. “We are in newfound valuation territory, and we are hopeful new management can help reset the trajectory, even though it will admittedly take time,” Wright wrote.

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For now, UnitedHealth’s troubles serve as a reminder that even in a broadly rising market, individual companies can still face significant headwinds. Whether due to management shake-ups, regulatory risks, or external investigations, such events can create sudden volatility and distort the performance of major indexes like the Dow. Still, the wider rally indicates strong investor sentiment driven by macroeconomic factors—such as the easing of global trade tensions—which continues to support the bullish outlook for equities overall.

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In the coming weeks, market watchers will keep a close eye on developments at UnitedHealth, especially as a new CEO takes the helm and as any potential regulatory issues unfold. Meanwhile, investors remain hopeful that the broader market can maintain its momentum—especially if high-profile companies like UnitedHealth can stabilize or even recover.

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