Losses for health care stocks help push Wall Street lower
[August 01, 2025] By
DAMIAN J. TROISE and ALEX VEIGA
Stocks capped a choppy day of trading on Wall Street with more losses
Thursday after an early big tech rally faded and a health care sector
pullback led the market lower.
The S&P 500 fell 0.4%, its third straight decline. The benchmark index,
which is just below the record high it set on Monday, notched a 2.2%
gain for the month of July and is up 7.8% so far this year.
The Dow Jones Industrial Average lost 0.7%, and the Nasdaq composite
closed less than 0.1% lower.
Roughly 70% of stocks in the S&P 500 lost ground, with health care
companies accounting for the biggest drag on the market.
Health care stocks sank after the White House released letters asking
big pharmaceutical companies to cut prices and make other changes in the
next 60 days. Eli Lilly & Co. fell 2.6%, UnitedHealth Group slid 6.2%
and Bristol-Myers Squibb dropped 5.8%.
Gains by some big technology stocks with hefty values helped temper the
impact of the broader market's decline.
Meta Platforms surged 11.3% after the parent company of Facebook and
Instagram crushed Wall Street’s sales and profit targets even as the
company continues to pour billions of dollars into artificial
intelligence.
Microsoft climbed 3.9% after posting better results than analysts
expected. The software pioneer also gave investors an encouraging update
on its Azure cloud computing platform, which is a centerpiece of the
company's artificial intelligence efforts.
Big Tech companies have regularly been the driving force behind much of
the market's gains over enthusiasm for the future of artificial
intelligence.
Elsewhere in the market, design software company Figma soared in its
stock market debut. The stock vaulted 250% above its initial public
offering price of $33 a share.
All told, the S&P 500 fell 23.51 points to 6,339.39. The Dow dropped
330.30 points to 44,130.98, and the Nasdaq gave up 7.23 points to finish
at 21,122.45.
Earnings remain a key focus outside of the technology sector in what has
been a heavy week so far for corporate financial results. CVS Health
fell 0.3% after it topped Wall Street expectations for the second
quarter and raised its full-year forecast again.
In economic news, the Commerce Department said prices rose 2.6% in June
compared with a year ago, as measured by the personal consumption
expenditures index. That's the Federal Reserve's preferred measure for
inflation. The latest reading was slightly higher than economists
expected and also marks an increase from an annual pace of 2.4% in May.
Results from another measure of inflation earlier this month, the
consumer price index, also showed inflation rising in June.
Also on Thursday, a report showed that the number of Americans filing
for unemployment benefits inched up last week.
The latest updates on inflation and the jobs market are landing amid
lingering concerns about the impact of tariffs. Inflation's temperature
is being closely monitored by businesses and the Fed to better gauge the
impact of President Donald Trump’s on-again-off-again approach to import
taxes. Companies including Ford and Hershey’s have more recently warned
that tariffs are weighing on their latest and projected financial
results.
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Robert Charmak, right, works on the floor at the New York Stock
Exchange in New York, Wednesday, July 30, 2025. (AP Photo/Seth Wenig)
 Trump has said he will levy tariffs
against goods from dozens of countries if they don’t reach
agreements with the U.S. by Friday. The latest developments in the
seemingly unpredictable tariff landscape include a potential pause
in tariff escalations with China and a deal with South Korea.
However, Trump said Thursday that he would enter a 90-day
negotiating period with Mexico over trade as 25% tariff rates stay
in place.
The reasons behind trade policy decisions remain unpredictable. On
Wednesday, Trump signed an executive order to impose his threatened
50% tariffs on Brazil. He has directly linked the import tax to the
trial of his ally, the country’s former president Jair Bolsonaro. He
has also said that trade negotiations with Canada would be more
difficult in the wake of that nation's economically unrelated
decision to recognize a Palestinian state.
Uncertainty over tariffs and inflation have prompted the Fed to
leave its benchmark interest rate alone through the central bank's
past five meetings, including the one that ended Wednesday. The Fed
has been trying to cool the rate of inflation back to its target of
2%. It has come close, but inflation remains stubbornly stuck just
above that target.
A cut in rates would give the job market and overall economy a
boost, but it could also risk fueling inflation. Fed Chair Jerome
Powell has been pressured by Trump to cut the benchmark rate, though
that decision isn't his to make alone, but belongs to the 12 members
of the Federal Open Market Committee.
“Inflation is only a bit above the Fed’s target, but looks likely to
rise in the second half of the year due to tariffs," said Bill
Adams, chief economist for Comerica Bank. “With the job market in
pretty good shape, they see room to hold interest rates steady and
lean against inflation’s increase near-term.”
Wall Street has been tempering their expectations for rate cuts at
the Fed's next meeting in September. Traders now see a 39% chance of
a rate cut, according to data from CME Group. That's down from 58.4%
a week ago and a 75.4% chance a month ago.
Treasury yields held steady in the bond market. The yield on the
10-year Treasury was unchanged at 4.37%. The yield on the two-year
Treasury remained at 3.94% from late Wednesday.
Markets were mostly mixed in Asia and Europe.
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