Healthcare Stocks Are Cratering, but the AI Rally Seems Back in Earnest

Published: May 13, 2025 by Omor IE

Key Points

Tech stocks and growth stocks are surging due to lower inflation and lowered recession risks.
The broader stock market is also positive due to the U.S.-China tariff pause deal.
Healthcare stocks are cratering due to Trump pledging to slash drug costs.
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AI and growth stocks in general have continued extending their gains so far today after the CPI report showed inflation is cooling, and is doing so slightly faster than expected. As a result, Goldman Sachs has slashed expectations for a recession and bumped up the S&P 500’s target all the way to 6,500 by year-end. This would mark another year of solid gains for the stock market and a record high for the S&P 500.

But as tech stocks and most sectors have been seeing rallies, the same can’t be said for healthcare stocks. President Donald Trump signed an executive order to reduce prescription drug prices in the U.S. He is implementing a “Most-Favored-Nation” drug pricing policy that would require pharmaceutical companies to offer Americans the same prices paid by comparable developed nations.

If pharmaceutical manufacturers fail to offer these pricing levels voluntarily, the Secretary of Health and Human Services is instructed to propose rules to impose such pricing and take “other aggressive measures” to reduce drug costs by 30% to 80%.

Here’s a market update as of 11:00 AM (ET) today.

The S&P 500 is up 42.48 points, or 0.73%.
The Nasdaq Composite is up 276.65 points, or 1.47%.
The Dow Jones Industrial Average is down 172.89 points, or 0.41%.

Healthcare Stocks Fall

Healthcare stocks are falling and are being led by UnitedHealth Group (NYSE:UNH).

UNH stock is down 14.7% after its CEO Andrew Witty stepped down and the company suspended its guidance.
Humana (NYSE: HUM) is down 7%.
Elevance Health (NYSE: ELV) is down 6.6%.
CVS Health (NYSE: CVS) is down 4.7%.
Merck & Co. (NYSE: MRK) is down 3.5%.
Johnson & Johnson (NYSE: JNJ) is down 2.7%.

Notable Losers Today

Halozyme Therapeutics (NASDAQ: HALO) is down 26.4% as it was downgraded by Leerink Partners.
Exodus Movement (NYSEAMERICAN: EXOD) is down 24.2% as Q1 results didn’t impress Wall Street.
Hertz Global Holdings (NASDAQ: HTZ) is down 18.4% due to a disappointing Q1 report.
Pony AI (NASDAQ: PONY) is down 16.7% after a 382% rally.
Topgolf Callaway Brands (NYSE: MODG) is down 11.1% as revenue falls in Q1.

Notable Gainers Today

Landsea Homes (NASDAQ: LSEA) is up 60% after an acquisition announcement by New Home Co.
Microvast Holdings (NASDAQ: MVST) is up 30.6% after it beat earnings and revenue estimates in Q1. EPS of $0.05 was better than the $0.01 consensus, and revenue at $116.49 million was better than the $105.76 million consensus.
Intuitive Machines (NASDAQ: LUNR) is up 24% after solid Q1 earnings showed continued revenue growth. It won a NextSTEP 2 contract from NASA for Moon-to-Mars logistics.
Archer Aviation (NYSE: ACHR) is up 22.7% after better-than-expected Q1 results. It is teaming up with Palantir (NASDAQ: PLTR) and will also ship its air taxi to the UAE. Cantor Fitzgerald also maintained its Overweight rating on the stock.
Array Technologies (NASDAQ: ARRY) is up 19.4% due to the solar sector rallying in tandem as trade deals take effect.

TBI, FSLR, RUN, COIN, SMR, SMCI, ARWR, NXT, VG, HIMS, FLNC, and DGNX are all up big today.