Nov. 13 at 8:30 PM
Healthcare stocks in the S&P 500 have surged about 7% since early November, outperforming the broader market, which is down roughly 1%. The gains appear driven less by fundamental developments and more by investors reallocating capital from wobbling tech stocks into undervalued healthcare names. Despite recent strength, the S&P 500 Healthcare sector index, up 12% for the year, still lags the broader S&P 500, which is up 15%.
Analysts note that underlying fundamentals in healthcare haven’t changed significantly, but depressed valuations earlier this year—around 16 times expected earnings versus 20 times for the broader market—made the sector attractive. UnitedHealth Group, for example, saw valuations fall to 12 times expected earnings before rebounding, partially aided by Warren Buffett’s investment. Other catalysts included Pfizer securing a favorable drug pricing and tariff deal with the Trump administration, which briefly boosted drug stocks.
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