These Were the 2 Worst-Performing Stocks in the S&P 500 in May 2025

Despite the S&P 500's 6.2% gain in May, nearly 30% of its stocks declined, with UnitedHealth Group (UNH) and Regeneron Pharmaceuticals (REGN) emerging as the worst performers. UnitedHealth plunged 26.6% after its CEO's abrupt resignation, withdrawal of its earnings outlook due to rising Medicare Advantage costs, and allegations of improper practices, while Regeneron fell 18.2% after a failed phase 3 trial for its COPD drug, itepekimab, potentially delaying peak sales.

Analysis

The S&P 500's 6.2% advance in May belied considerable internal market weakness, as nearly 30% of its constituent stocks registered declines, with the healthcare sector facing notable headwinds. UnitedHealth Group (UNH) emerged as the index's worst performer, plunging 26.6% to a 52-week low of $248.88 per share. This sharp decline followed the unexpected resignation of its CEO, the withdrawal of its full-year earnings guidance due to escalating Medicare Advantage costs, and significant controversy surrounding alleged improper cost-containment strategies and a reported Department of Justice criminal investigation into potential Medicare fraud, claims which UnitedHealth has denied. The reappointment of former CEO Stephen J. Hemsley and management's projection of a return to growth in 2026 provide some potential stability, but the company's second-quarter earnings report on July 29 is now a pivotal event. Concurrently, Regeneron Pharmaceuticals (REGN) shares fell 18.2% in May, predominantly on May 30, after its experimental chronic obstructive pulmonary disease drug, itepekimab, failed a second phase 3 trial. This setback jeopardizes the drug's projected peak sales of nearly $5 billion and likely postpones its market entry by several years, overshadowing the company's otherwise robust pipeline and recent initiation of a quarterly dividend.

Key Decisions for Investors

• Given UnitedHealth Group's CEO transition, withdrawn guidance, and serious allegations, investors should await clarity from its Q2 earnings on July 29 and further developments on investigations before making significant investment decisions.
• The clinical trial failure for Regeneron's itepekimab necessitates a careful reassessment of its near-term growth trajectory and valuation, despite its diversified pipeline and new dividend initiation.
• The significant underperformance of these healthcare majors amidst a broader market rally underscores the importance of scrutinizing company-specific risks and catalysts within portfolios, particularly in sectors facing regulatory and operational pressures.