Dow Futures Drop 200 Points as UnitedHealth Sinks 8%—Can S&P 500 Rebound Today?

S&P 500 Futures Hold Steady as Traders Eye Economic Data

S&P 500 futures were flat early Friday, showing caution after Thursday’s pullback triggered by Walmart’s disappointing earnings forecast. S&P 500 futures edged up 0.3%, while Dow Jones Industrial Average futures slipped 205 points, or 0.4%, weighed down by an 8% drop in UnitedHealth following a Justice Department investigation report.

The prior session saw the Dow tumble 450 points, with the S&P 500 and Nasdaq Composite both shedding 0.4% and 0.5%, respectively. Investors pointed to Walmart’s 6.5% plunge, ongoing inflation concerns, and losses in Palantir as contributing factors. Art Hogan, chief market strategist at B. Riley Wealth Management, suggested the sell-off may have been overdone and highlighted Friday’s economic data as a potential stabilizer.

Can Economic Data Spark a Rebound?

Despite Thursday’s losses, the S&P 500 remains on track for a modest weekly gain of 0.1%, while the Nasdaq Composite is down 0.3%. The Dow is the weakest of the major indexes, facing a potential 0.8% weekly decline.

Hogan believes the purchasing managers’ index (PMI) and existing home sales data could guide the market’s next move. “There’s a chance of bargain hunting, especially if economic data meets expectations,” he told CNBC. However, he cautioned that no single data point is likely to drive a significant market shift.

Celsius Holdings Soars, UnitedHealth Tumbles

Celsius Holdings surged over 31% premarket after reporting strong earnings and announcing an acquisition deal with Alani Nutrition. The energy drink maker posted adjusted earnings of 14 cents per share on $332 million in revenue, beating expectations of 11 cents per share and $326 million in sales.

Meanwhile, UnitedHealth shares sank 8% after The Wall Street Journal reported a Justice Department investigation into its Medicare billing practices. The news also pressured other health insurers, with CVS Health down 4.9% and Humana dropping 5.3%.

Block fell 8.8% after missing fourth-quarter earnings and revenue targets. The fintech firm reported adjusted earnings of 71 cents per share on $6.03 billion in revenue, falling short of analysts’ estimates of 87 cents per share on $6.29 billion.

Is Market Rotation an Opportunity for Traders?

Adam Crisafulli of Vital Knowledge advised investors to avoid panicking over Thursday’s Walmart-driven decline. He encouraged traders to focus on market rotation into small and mid-cap stocks rather than sticking to mega-cap tech names.

Sentiment data also suggests a potential buying opportunity. The American Association of Individual Investors survey showed bearish sentiment easing to 40.5%, while bullish sentiment remained muted at 29.2%. Such indicators often appeal to contrarian investors looking for market entry points.

Market Forecast: Aiming for a Late-Week Recovery

If Friday’s economic data meets or exceeds expectations, the S&P 500 could regain momentum. Bargain hunters may take advantage of oversold names, particularly in the consumer and tech sectors.

Next week’s Personal Consumption Expenditures (PCE) report, a key inflation gauge for the Federal Reserve, could add volatility. While traders are pricing in at least one rate cut this year, clarity from upcoming economic data could set the stage for a more definitive market trend.

For now, the market remains delicately balanced, with short-term opportunities for traders looking to capitalize on recent dips.

More Information in our Economic Calendar.