Stocks drop in U.S., with UnitedHealth taking a plunge due to allegations of ongoing criminal investigation
GOING DOWN: Wall Street takes a dive as uncertainty mounts
In the heart of New York, Wall Street stocks took a nosedive on Thursday, following a mishmash of economic data and a cloud of uncertainty. Shares of UnitedHealth Group plummeted after rumors swirled about a potential criminal investigation involving the health giant.
The U.S. retail sales chill was barely noticeable in April, making barely a ripple in the American economy. On the other hand, unexpectedly, wholesale inflation took a dip during the month.
Federal Reserve Chair Jerome Powell delivered a sobering warning about the potential for "prolonged" supply shocks as the economy treads the treacherous waters of President Donald Trump's unpredictable tariff policies.
Within 15 minutes of the trading bell, the Dow Jones Industrial Average had sunk 0.3 percent, landing at 41,927.78. The S&P 500 suffered a 0.4 percent dip to 5,871.31, while the tech-savvy Nasdaq Composite Index dipped a hefty 0.7 percent, hovering at 19,010.41.
Analysts had been warning that U.S. stocks could be in for a tumble after gaining ground in recent weeks. The focus of investor attention was firmly on trade developments.
UnitedHealth Group took a hit, plummeting more than 15 percent after a Wall Street Journal report claimed the health giant was under investigation by the U.S. Department of Justice for possible Medicare fraud. In response, the company issued a statement denying receiving any official notification of an investigation, labeling the report "deeply irresponsible" due to the scant details presented.
Meanwhile, Walmart felt the pinch of tariffs, with shares falling by 4.1 percent as the retail giant warned of increased prices due to the levies, stating that the tariffs were still too high for the company to swallow without passing the cost on to customers.
The Department of Justice has remained tight-lipped about the potential investigation, leaving the nature of the probe shrouded in mystery. This probe comes on the heels of previous reports of a civil Medicare fraud investigation and an ongoing antitrust probe into UnitedHealth's operations.
Investors were warned that the tumble in U.S. stocks might continue, as uncertainty surrounding trade developments persisted. This uncertainty led to a significant dip in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite Index, reflecting negatively on the broader finance and technology sectors. The unnerving news about a potential criminal investigation involving UnitedHealth Group, one of the largest stocks on the NYSE, further escalated this financial crisis. Despite UnitedHealth's denial of receiving any official notification, the stock plummeted, causing ripples in the investment world.
