UnitedHealth stock surges on Trump election win

UNH stock jumps more than 6% on Trump presidential election win.
Health insurers that manage Medicare Advantage programs saw their share prices rise.
The Biden administration has been attempting to lower reimbursement rates for senior healthcare.
Companies focused on Medicaid care swung to losses as Republicans are less favorable to the poor.

Clay Webster FXStreet

UnitedHealth Group (UNH), the single largest weighting in the Dow Jones Industrial Average (DJIA), has risen about 6% on Wednesday in light of Donald Trump’s reelection to the US presidency.

Though states are continuing to count the outstanding vote, Trump has secured enough electoral votes to ensure his rise to the 47th presidency of the United States, an office he will enter on January 20, 2025. Additionally, his Republican Party has won a majority in the Senate, the upper house of Congress. Control of the House of Representatives, the lower chamber, is still uncertain for now.

The DJIA has surged more than 3% on Wednesday, easily overpowering normally more volatile S&P 500 and NASDAQ indices, which have gained closer to 2% each.

UnitedHealth Group stock news

UnitedHealth stock shot up to just under $600 on Wednesday as a Trump presidency is expected to offer better reimbursement rates for health insurers in the United States. The Biden administration had been strict on reimbursement levels under the Medicare program that pays for healthcare among seniors. In fact, President Biden’s administration has attempted to cut reimbursement rates for Medicare.

In particular, insurers that run Medicare Advantage programs saw the most gains. These programs are private versions of the government's main government-led enrollment program.

The positivity around a Trump presidency was felt throughout the health insurance industry. CVS Health (CVS), which owns insurer Aetna, bounced 11% higher, but that was a reaction to third-quarter earnings as well. Humana (HUM) stock also advanced at a healthy clip.

Meanwhile, insurers and healthcare providers like Elevance Health (ELV) and Centene (CNC) that focus on providing care through the government’s Medicaid program that offers healthcare to the lower income segment saw their shares slide.

CVS bested its consensus revenue figure by a wide margin, but the company missed the bottom line consensus due to restructuring charges. The CVS segment that operates Aetna saw revenue of $33 billion, which rose 26% YoY. However, premium deficiency reserves topped $1 billion, which led to a profit loss in the segment.

UnitedHealth Group stock forecast

UnitedHealth stock is nearing resistance at $608. This level was difficult to maintain on September 4 and October 14. There have been other instances in the past two months where rallies dissipated once they rose above $600.

UNH stock has moved lower on Wednesday after reaching an early intraday high of $605.50. Shares sank back to the $590s by mid-session. Expect another attempt at $608 and for UNH to maintain that price level as traders grow excited about a Trump presidency that should reliably be more pro-business and less serious about regulatory matters.

UNH daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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