Stock Market Update

[BRIEFING.COM] The major averages continue to trade firmly lower at midday. 

Managed care names are rallying after the Centers for Medicare & Medicaid Services released its CY27 Medicare Advantage (MA) and Part D Rate Announcement, which came in meaningfully better than expected and eased concerns about ongoing margin pressure.

CMS projected a 2.48% average increase in MA payments for CY27, equating to over $13 billion in additional funding. This compares to the preliminary estimate of just 0.09%, or ~$700 million, representing a significant upside surprise. This rate announcement provides a meaningful sentiment shift for the managed care group, which has been under pressure from a prolonged period of unfavorable rate updates and rising medical costs.

As a result, managed care names such as UnitedHealth (UNH 308.73, +27.37, +9.73%) and Humana (HUM 196.69, +14.04, +7.69%) are among the best-performing S&P 500 components today. However, the health care sector (-0.3%) still trades modestly lower as weakness is broad across the majority of its other components, with pharmaceutical names such as Merck (MRK 117.12, -3.73, -3.09%) and Pfizer (PFE 26.90, -0.93, -3.34%) among the underperformers.