How One Big Stock is Dragging Down the Dow in 2025

Stocks

Summary:

UnitedHealth’s 40% drop in 2025 has heavily weighed on the Dow Jones, cutting its return by 3%. Yet, thanks to diversification, the index lags the S&P 500 by only 2%.

It’s been a sluggish year for the Dow Jones Industrial Average compared to the broader market. As of early June, the SPDR Dow Jones Industrial Average ETF Trust (DIA) is up just over 1%, trailing the Vanguard S&P 500 ETF (VOO), which has gained nearly 3%.

The reason for the underperformance is, in large part, a single stock.

UNH Drags on DIA

UnitedHealth Group Inc. (UNH) has shaved roughly three percentage points off the Dow’s year-to-date return. No other stock in the 30-member index has contributed more than 0.9 percentage points in either direction.

Shares of UnitedHealth have been pummeled in 2025, falling more than 40% year to date due to concerns around Medicare Advantage margins and regulatory pressures—issues we’ve covered in depth previously.

That sharp decline has been especially painful for the Dow, a price-weighted index. Unlike the market-cap-weighted S&P 500, the Dow gives more influence to companies with higher share prices. At the start of the year, UnitedHealth was trading around $500 per share, making it the second-largest holding in DIA with nearly an 8% weight.

Now, with the stock hovering closer to $300, its weight has declined but remains substantial at about 4.4%, making it the ETF’s eighth-largest position. The drop illustrates how the Dow’s price-weighting methodology can amplify the impact of high-priced stocks, for better or worse.

Damage Contained

Still, the damage is surprisingly contained. Despite the collapse of one of its biggest components, DIA is lagging VOO by only about two percentage points. That speaks to the index’s sector diversification and the resilience of its blue-chip constituents.

For all its quirks—including a relatively small roster of 30 stocks and price-based weighting—the Dow remains an interesting gauge of large-cap U.S. companies.

This year’s performance is a reminder that even in a concentrated portfolio, diversification across industries and solid fundamentals can help soften the blow from an individual stock meltdown.

source : finance.yahoo

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Adam

Commodity

Gold prices are posting good gains in early U.S. trading Wednesday, following a key U.S. inflation report that did not raise any new red flags. Silver prices are modestly down. August gold was last down $0.40 at $3,354.40. July silver prices were last up $0.034 at $36.835.

The just-released U.S. data point of the week, the consumer price index report for May, saw the CPI rise 2.4%, year-on-year, right in line with market expectations and compares to up 2.3% in the April report. The core CPI (minus food and energy) came in at up 2.8%, year-on-year, close to being in line with market expectations and was up 2.8% in the April report. The report does not suggest problematic price inflation down the road and falls into the camp of the U.S. monetary policy doves.

Asian and European stocks were mixed to firmer overnight. U.S. stock indexes are pointed to firmer openings today in New York, and bumped up a bit after the CPI data. Trader and investor spirits were somewhat lifted after news reports said the U.S. and China have agreed on a framework to restore trade relations following two days of negotiations in London. No specifics were provided.

In other news, the World Bank said U.S. economic growth cut be cut in half due to tariffs and trade wars. The Bank forecast U.S. GDP growth of 1.4% in 2025, down from the 2.8% growth rate in 2024. The bank forecast global economic growth at 2.3% this year, down from its previous forecast of up 2.7%.

The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil futures prices are up and trading around $66.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.456%.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the weekly DOE liquid energy stocks report and the monthly Treasury budget statement.

Gold price higher following tame U.S. inflation data_1

Technically, August gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at last week’s high of $3,427.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,250.00. First resistance is seen at this week’s high of $3,370.40 and then at $3,400.00. First support is seen at the overnight low of $3,335.40 and then at $3,325.00. Wyckoff's Market Rating: 7.0.

Gold price higher following tame U.S. inflation data_2

July silver futures bulls have the solid overall near-term technical advantage. Prices are trending higher on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $40.00. The next downside price objective for the bears is closing prices below solid support at $34.00. First resistance is seen at this week’s high of $37.03 and then at $37.50. Next support is seen at $36.00 and then at $35.80. Wyckoff's Market Rating: 8.0.

source : kitco

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Warren Takunda

Economic

A cooler-than-expected inflation reading from May is not likely to shake the view of most Federal Reserve policymakers that rates should stay on hold until there is more clarity about the impact from President Trump’s tariffs.

Some economists were expecting to see higher costs from those tariffs showing up in the Consumer Price Index (CPI) report released Wednesday, but instead CPI showed that inflation pressures were relatively stable and even eased on a monthly basis.

The "core" measure of CPI, which excludes volatile food and energy costs, rose 2.8% over the past year in May, matching April. Monthly core prices increased 0.1%, a touch below April's 0.2% gain. Mild CPI Inflation Reading Not Likely to Shake the Fed's Wait-and-See Stance on Tariffs_1

Mild CPI Inflation Reading Not Likely to Shake the Fed's Wait-and-See Stance on Tariffs_1

Economist Claudia Sham, founder of Sahm Consulting, told Yahoo Finance the May report doesn’t “necessarily tell us where we are headed by the end of the year” and “I don’t think we have a picture yet of what the costs are from the current” Trump administration trade policy.

But what this does, she added, is delay the Fed’s ability to conclude that any tariff price increases are in fact temporary — a conclusion that would allow it to start cutting rates again.

This "may mean we delay the rate cuts.”

Investors are not expecting an easing of monetary policy until September, at the earliest. The Fed is widely expected to hold rates steady at its next meeting on June 17-18.

President Trump last week suggested the Federal Reserve and its chairman Jerome Powell should lower rates by a full percentage point, referring to moves made by other central banks to ease monetary policy.

"Europe has had 10 rate cuts, we have had none," he said in one social media post, adding "go for a full point, Rocket Fuel!"

Trump noted in a separate post that Powell is "is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!"

But a Labor Department jobs report released last week makes it even less likely the Fed will consider rate cuts in the near term, Fed watchers said, since it doesn't show that the labor market is grinding to a halt.

The Fed has not altered its benchmark rates at all in 2025 after reducing them by a full percentage point at the end of 2024, citing uncertainties about Trump's policies.

In fact, in recent weeks, several Fed policymakers have made it clear they are more worried about inflation than employment and thus are content to be patient about any changes to the Fed's current stance.

"I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain," Federal Reserve governor Adriana Kugler said last week in a speech at the Economic Club of New York.

Kansas City Fed president Jeff Schmid also said Thursday he is very focused on the risk for higher inflation from tariffs and that the Fed should "not let down our guard."

"While the tariffs are likely to push up prices, the extent of the increase is not certain, and likely will not be fully apparent for some time," Schmid added.

RSM Chief Economist Joe Brusuelas told Yahoo Finance on Wednesday after the CPI release that "we we're not really seeing much of the pass through, if some at all, from the tariffs," noting a 0.3% decline in new vehicles and 0.5% drop in used cars and trucks.

"But don't get too comfortable. When [companies] hike prices by 10% to 15%, it gets passed through eventually."

Source: Yahoofinance

To stay updated on all economic events of today, please check out our Economic calendar

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Devin

Economic

Central Bank

U.S. Treasury yields are set to decline further according to bond strategists who are clinging to expectations the Federal Reserve resumes cutting interest rates after pausing for more than half a year even as dealers are set to underwrite a deluge of new supply.

A slight majority now expect another sell-off in longer-dated bonds, the maturities most at risk, by the end of this month.

Concerns that President Donald Trump’s tax-cut and spending bill will add trillions of dollars to an already-staggering $36.2 trillion debt pile by 2034, along with tariff brinkmanship already have many holders of U.S. assets scrambling for the exit.

The rising "term premium" – what investors demand as compensation for holding longer-dated debt – leaves the market more vulnerable, particularly among foreign investors, ahead of upcoming Treasury bond auctions.

"The amount of debt we need to issue keeps rising and there doesn't appear to be anyone in Washington on either side that really has a plan to bring down deficits and address our fiscal situation," said Collin Martin, fixed income strategist, Schwab Center for Financial Research.

"That'll weigh on the long end of the curve where we need to see yields rise a bit to attract that marginal buyer."

Global sovereign bond yields have mostly risen in tandem over the past two months. A rapid sell-off in benchmark U.S. 10-year Treasuries in April pushed the yield up around 60 basis points.

That yield, which rises when prices fall, has since steadied, oscillating around 4.50%.

Median forecasts from nearly 50 bond strategists in a June 6-11 Reuters survey, most from dealers and sell-side firms, predicted the 10-year yield would decline a modest 13 bps to 4.35% in three months and to 4.29% in six from its current 4.48%.

Despite predicting a decline, more than half upgraded their forecasts from a May survey with many flagging the risk of yields moving higher.

"The 10-year will probably trade range-bound for a while between 4-4.50% and maybe even rise a little bit further, particularly given deficit concerns. The yield curve should continue to steepen as short-term yields drift gradually lower as the Fed cuts rates one or two more times by year-end," Schwab's Martin added.

The more interest rate-sensitive 2-year yield was forecast to decline a slightly steeper 17 bps to 3.85% in three months and to 3.73% by end-November, the survey showed.

Most economists polled by Reuters predict two or fewer rate cuts this year while rate futures are currently pricing two.

Source: Yahoo Finance

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Adam

Commodity

WTI Futures Eye Breakout Above 200-Day Moving Average

Light crude futures surged early Wednesday, building on Tuesday’s gains but falling just short of the 200-day moving average at $66.45. Prices touched $66.28 before retreating slightly into the close, with bulls now eyeing a clean break above technical resistance for confirmation of sustained upside.

If sellers reassert control, traders are watching $63.09 as a nearby support pivot. A decisive move above $66.45 could open the door toward the next major upside target near $68.21.

OPEC+ Output Rises, But Domestic Demand May Absorb Extra Supply

OPEC+ plans to raise production by 411,000 barrels per day in July, marking a fourth consecutive monthly increase. Yet analysts say the impact on global supply could be muted. Saudi Arabia and other OPEC+ members are likely to see increased domestic demand during summer months, helping absorb the added barrels. According to Capital Economics, this internal consumption may support prices in the near term by offsetting the supply increase.

U.S.-China Trade Truce Lifts Risk Appetite—But Demand Questions Remain

WTI’s seven-week high reflects renewed risk appetite following U.S.-China trade talks. The two sides have agreed on a framework to revive their trade truce and ease restrictions on rare earth exports, boosting sentiment.

As the world’s top two oil consumers, easing tensions reduces downside price risk. However, PVM’s Tamas Varga cautioned that traders remain uncertain about how much this progress will actually translate into stronger economic activity or higher oil demand.

Geopolitical Risk Premium Builds on Iran Threats

Geopolitical tensions are also back in focus. President Trump voiced skepticism about Iran’s willingness to curb uranium enrichment, while Tehran threatened to strike U.S. bases in the region if talks break down. The hardening rhetoric adds a premium to prices, with traders pricing in the potential for supply disruptions in the event of a broader conflict.

Crude Oil Inventory in Focus Ahead of EIA Report

Ahead of the official EIA inventory release, preliminary API data showed a 370,000-barrel draw in U.S. crude stocks last week. A confirmed decline would provide fresh support for prices, reinforcing the bullish tone heading into midweek trade. All eyes remain on the EIA figures for confirmation. Traders are looking for a draw of 2.4 million barrels.

Oil Prices Forecast: Bullish Bias Building Above Key Resistance

With support from geopolitical tensions, easing trade concerns, and stable demand fundamentals, the outlook for crude remains bullish—provided WTI can close above its 200-day moving average. A confirmed breakout could invite fresh buying, setting up a run toward the $68.00 handle. Failure to hold current gains, however, risks a pullback to the $63.00 area.

Source: fxempire

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Adam

Economic

China–U.S. Trade War

Here are five key things investors need to know to start the trading day:

Anticipation

Stocks rose on Tuesday as investors hoped for progress out of trade talks between the U.S. and China. The S&P 500 and Nasdaq Composite both notched their third straight session of gains, rising 0.55% and 0.63%, respectively. The Dow Jones Industrial Average also climbed 105.11 points, or 0.25%. All eyes are on May’s consumer prices report, set for release Wednesday morning, for the latest read on inflation. The highly anticipated CPI report — combined with Thursday’s PPI report and two Treasury auctions this week — will be a critical test for the bond market. Follow live market updates.

Shake on it

Representatives from the U.S. and China on Tuesday evening said that the two countries reached an agreement on trade following two days of negotiations in London. U.S. Commerce Secretary Howard Lutnick told reporters that the two sides “have reached a framework to implement the Geneva consensus and the call between the two presidents.” Both countries had accused each other of violating the agreements they made in Switzerland in May — which included a 90-day suspension of reciprocal tariffs on each other’s goods — but a phone call between Presidents Trump and Xi last week appeared to stabilize the relationship. Participants of the London talks said they will now return to their respective countries to get Trump’s and Xi’s approval of the framework before implementing it.

Zuckerberg’s $14 billion bet

Frustrated by Meta’s place in the AI race, CEO Mark Zuckerberg is hiring Scale AI co-founder Alexandr Wang to help achieve the tech giant’s artificial intelligence ambitions, people familiar with the matter told CNBC. Meta is finalizing a deal to invest $14 billion into Wang’s data-labelling and annotation startup, which has helped major firms like OpenAI, Google and Microsoft

prepare the data they use to train their AI models. The decision to convince Wang to join Meta is uncharacteristic for Zuckerberg — who typically hires loyalists for top positions — but underscores the CEO’s belief that outside talent may be best suited to jump-start Meta’s AI capabilities, the people said.

Switching lanes

General Motors will invest $4 billion in three U.S. plants where it plans to add the assembly of some of its Mexican-produced vehicles, the company announced Tuesday. The automaker said the ten-figure investment will bring the production of the Chevrolet Blazer to its Spring Hill Assembly in Tennessee and the production of the Chevrolet Equinox to its Fairfax Assembly in Kansas. Both models are currently assembled at the Ramos Arizpe plant in Mexico. And while production of the Blazer will fully move to the U.S., some production of the Equinox is expected to continue in Mexico, a source familiar told CNBC. The move by GM comes as negotiations between the Trump Administration and Mexican leaders have yet to yield new trade agreements. President Trump’s 25% tariffs on imported vehicles took effect in April, and his 25% tariffs on imported auto parts took effect in May.

Order for AI?

Your next Starbucks order might be brewed with the help of artificial intelligence. The coffee chain on Tuesday announced that it will roll out a generative AI assistant created with Microsoft Azure’s OpenAI platform at 35 stores this month. Tablets equipped with so-called “Green Dot Assist” will provide baristas with answers to a range of questions, from how to make a certain drink to how to fix equipment, in an effort to simplify their jobs and speed up service. CEO Brian Niccol has made cutting service times a priority since taking the helm last year, setting a goal of less than four minutes per order as he tries to reverse slumping U.S. sales. A broad launch of the AI assistant is planned for the fall.

source : cnbc

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Thomas

India–Palestine conflict

The NY Post has published a new Trump interview focused on apparently stalled Iran nuclear deal efforts which resulted in a surge in oil prices.

The President said in the interview he's getting "less confident" about ongoing nuclear negotiations with Iran, soon after which oil rose as well as benchmark treasury yields and gold, as investors weigh the possibility of US-Iran nuclear talks falling apart.

Trump was asked whether he thinks the Islamic Republic will agree to shut down its nuclear program. "I don’t know. I did think so, and I’m getting more and more — less confident about it," he responded.

"They seem to be delaying, and I think that’s a shame, but I’m less confident now than I would have been a couple of months ago," Trump continued. "Something happened to them, but I am much less confident of a deal being made."

Then the question was raised by the Post, "what happens then?" To which Trump responded:

“Well, if they don’t make a deal, they’re not going to have a nuclear weapon,” Trump answered. “If they do make a deal, they’re not going have a nuclear weapon, too, you know? But they’re not going a have a new nuclear weapon, so it’s not going to matter from that standpoint.

“But it would be nicer to do it without warfare, without people dying, it’s so much nicer to do it. But I don’t think I see the same level of enthusiasm for them to make a deal. I think they would make a mistake, but we’ll see. I guess time will tell.”

On the question of China's influence on Tehran, Trump described, "I just think maybe they don’t want to make a deal. What can I say?” he said. “And maybe they do. So what does that mean? There’s nothing final."

Via AFP

On Tuesday Trump acknowledged in a Fox News interview that Iran is becoming "much more aggressive" in these negotiations. And the day prior he had told reporters that the Iranians are "tough negotiators" and sought to clarify that he would not allow Tehran to enrich uranium on its soil, after some recent contradictory reports suggested the White House had backed off this demand.

Washington is awaiting a formal response from the Islamic Republic, which is expected to submit a counter-proposal in the coming days, just ahead of an expected sixth round of indirect talks with the US in Muscat, Oman, slated for Sunday, June 15.

More geopolitical headlines via Newsquawk:

Iranian Foreign Minister "As we resume talks on Sunday, it is clear that an agreement that can ensure the continued peaceful nature of Iran's nuclear program is within reach—and could be achieved rapidly.". Thereafter, US President Trump is less confident about the Iran deal, according to a New York Post podcast interview.
Iranian Foreign Minister says "Trump's position on Iran's possession of nuclear weapons could form the basis of the agreement ", according to Al Arabiya.
US Secretary of State Rubio said the US condemns sanctions imposed by the governments of the UK, Canada, Norway, New Zealand, and Australia on two sitting members of the Israeli cabinet. Rubio also stated that Israel sanctions do not advance US-led efforts to achieve a ceasefire, bring all hostages home, and end the war, while he added that the US urges a reversal of the sanctions.
"Iran's Defense Minister warns on US officials' threats of conflict should negotiations falter: We hope for successful talks, but if conflict is imposed on us, Iran will respond decisively, targeting all US bases in host countries.", via Journalist Aslani.
"Iran successfully tested a missile equipped with a two-ton warhead last week", according to Iran International citing the Iranian Defense Minister.

Source: Zero Hedge

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