S&P500: Healthcare Stocks Shine as Retail Earnings Drag Broader Market

The S&P 500 rose 0.1% on Tuesday as traders balanced optimism over year-end seasonality with concerns about President-elect Donald Trump’s proposed tariffs. While the Nasdaq Composite gained 0.3%, the Dow Jones Industrial Average dropped 245 points, or 0.6%, dragged down by Amgen’s steep decline.

Investors also monitored sector-specific moves, housing data, and new healthcare policy developments that could shape trading activity.

Trade policy concerns hit automakers hard, with Ford and General Motors falling more than 2% and 7%, respectively. The iShares MSCI Mexico ETF (EWW), which tracks Mexican equities, dropped over 2%, reflecting heightened anxiety over trade relationships with Mexico.

Healthcare Stocks Jump on Policy News

Shares of Novo Nordisk and Eli Lilly rose 2% and 3%, respectively, after President Biden proposed Medicare and Medicaid coverage for weight-loss drugs like Wegovy and Zepbound. Analysts believe expanded coverage could significantly benefit these companies, though details about eligibility and implementation remain unclear.

Weak Home Sales Signal Housing Challenges

New home sales plummeted 17% in October, falling to 610,000 units and missing forecasts of 725,000. Rising mortgage rates, now at 6.72%, have dampened demand. Despite declining sales, median home prices climbed to $437,300, highlighting tight inventory as a factor in sustaining higher prices.

Retail Earnings Weigh on Sentiment

Kohl’s shares plunged 17% in premarket trading after the company missed third-quarter expectations. The retailer reported earnings of $0.20 per share on $3.51 billion in revenue, below consensus estimates of $0.28 per share and $3.64 billion. Comparable sales fell 9.3%, steeper than the expected 5.1% decline, contributing to the stock’s year-to-date loss of 36%.

Market Forecast: Where Could the Market Be Headed Next?

The market’s short-term outlook remains cautiously optimistic. While concerns over tariffs and weak retail performance weigh on sentiment, strong year-end seasonality and investor skepticism about aggressive trade measures could support further gains in the S&P 500. Key drivers this week will include Federal Reserve meeting minutes and reduced trading volumes ahead of the Thanksgiving holiday.