UnitedHealth Group, a leading healthcare insurance giant, has seen its stock price plummet by 22.4% on April 17 and another 17.8% on Tuesday after its CEO stepped down and the company removed its full-year guidance. This drastic sell-off has pushed shares to their lowest level in five years, with a year-to-date decline of 38.5%.
The main reasons behind UnitedHealth’s downward spiral include rising costs, Department of Justice investigations into Medicare Advantage billing practices, and other issues affecting the company’s business model. Despite solid year-over-year growth in its two key segments – UnitedHealthcare and Optum – investors are left with more questions than answers.
UnitedHealth’s massive market cap of around $282 billion makes it a significant player in the healthcare sector, but it is relatively small compared to mega-cap tech stocks. While its sell-off may not impact the S&P 500 significantly on its own, it has had an effect on the Dow Jones Industrial Average, particularly when considering its price-weighted composition.
The decline of UnitedHealth’s stock price has a ripple effect on the overall market, with some stocks driving major indexes like the S&P 500 and Nasdaq Composite. Understanding the differences between market-cap-weighted and price-weighted indexes can help investors filter out market noise and make more informed decisions for their portfolios.
Source: https://www.fool.com/investing/2025/05/16/unitedhealth-stock-crash-sp-500-dow-jones