Stocks from the Dow Jones Industrial Index Experiencing a Price Drop, Rather Than Uptick
In recent times, the Dow Jones Industrial Average (DJIA) has been facing a downtrend, with several of its components experiencing significant price drops. This includes tech giants like Apple and Salesforce, as well as established companies such as Home Depot, Merck, and UnitedHealth Group.
The decline in these stocks can be attributed to a combination of factors, primarily profit-taking after a strong first half of 2025, ongoing political and economic uncertainties, and earnings report expectations. After finishing up about 5% for the year despite earlier volatility, investors have been engaging in profit-taking and risk reduction, leading to downward pressure on stock prices.
Economic indicators and reports also play a crucial role. For instance, quarterly earnings reports from large-cap companies like Apple and Salesforce significantly influence their stock prices and, by extension, the Dow's direction. Key economic indicators such as unemployment rate, inflation, GDP, and purchasing managers’ index can lead to sudden fluctuations in stock performance. Reports or outlooks that fall short of expectations have the potential to cause stock price drops.
Political tensions and debates over significant legislation, such as the “Big Beautiful Bill” in the Senate, contribute to market uncertainty. This uncertainty tends to increase volatility affecting index stocks. Moreover, the VIX Index, a measure of market volatility and uncertainty, often correlates with declines in the Dow and its constituents. Heightened market anxiety can thus weigh on stocks like Home Depot, Merck, and UnitedHealth Group.
Since the DJIA is a price-weighted index, movements in high-priced stocks like Apple and Salesforce have an outsized impact on the overall index. Therefore, any negative factors affecting their stock prices can contribute significantly to price drops in the Dow.
As of the mentioned date, UnitedHealth Group, which has a market capitalization of $283 billion, is the component of the DJIA that is pulling it down the most. The company's stock traded at $620 in November 2024 and is currently at $311, representing a 50% slide. Apple's peak price was $260 in late December 2024, and it has since dropped to just below $170. Salesforce peaked at just above $365 in early December 2024, and its price has dropped to $230.
Interestingly, the S&P 500 and the Nasdaq 100 have achieved "new highs" last week, while the Dow Jones Industrial Average has not reached "new highs" as of the mentioned date. The 50-day moving average for Home Depot appears to be trending upward, and it closed above it on the last three days of June.
Additional analysis and commentary can be found at johnnavin.substack.com. Sources for the data and charts are FinViz.com and Stockcharts.com. It's essential to note that no artificial intelligence was used in the writing of this post.
In the current financial landscape, the downtrend in the Dow Jones Industrial Average (DJIA) is largely due to factors such as profit-taking, economic uncertainties, and earnings report expectations, affecting companies like Apple, Salesforce, Home Depot, Merck, and UnitedHealth Group. The S&P 500 and the Nasdaq 100, on the other hand, have recently reached new highs, contrasting the Dow's performance in the stock-market.
