S&P 500 Gains and Losses: Johnson & Johnson Shares Drop After Court Ruling
By Michael Bromberg
Published April 1, 2025, 5:06 PM EDT
The S&P 500 saw a modest increase of 0.4% on Tuesday, April 1, amid a backdrop of uncertainties surrounding upcoming trade tariffs announced by the Trump administration. While several sectors experienced gains, shares of Johnson & Johnson (JNJ) took a significant hit following a court ruling regarding liability settlements related to its baby powder products.
Market Overview
The trading session marked a cautious start to the second quarter, with major U.S. equity indexes reflecting mixed outcomes. The S&P 500 gained 0.4%, while the Nasdaq Composite rose by 0.9%. In contrast, the Dow Jones Industrial Average dipped slightly, losing less than 0.1%.
Investors were navigating the market with one eye on the anticipated announcement of global tariffs by President Donald Trump. The proposed levies aim for trade reciprocity, but details remain unclear, leading to volatility and apprehension in the markets.
Notable Stock Movements
A notable performer on the S&P 500 was Vistra (VST), the power generation company, which experienced a remarkable 4.1% increase. This rise comes after the company drew attention for its potential to supply electricity to energy-intensive artificial intelligence data centers, reversing significant losses from previous weeks.
Fashion stocks also performed well, boosted by an impressive earnings report from PVH Corp. (PVH), the parent company of Calvin Klein. PVH shares surged 18% following its positive quarterly results. Ralph Lauren (RL) shares increased by 3.7%, aided by a placement in Bank of America’s list of top stock picks for the current quarter, while Coach parent Tapestry (TPR) gained 3.5%.
In the technology sector, Tesla (TSLA) shares rose 3.6% in anticipation of the company’s first-quarter delivery update, despite a backdrop of protests against CEO Elon Musk and challenges within European markets. Reports indicated that Tesla’s Model Y was a best-seller in China during March 2025. #### Johnson & Johnson’s Legal Setback
In stark contrast to the positive performances of other companies, Johnson & Johnson’s stock plummeted by 7.6%, marking the steepest decline on the S&P 500 for the day. This drop followed a judge’s rejection of the company’s attempt to settle liability claims related to its talc-based baby powder products, which are alleged to cause ovarian cancer.
The rejected settlement plan involved a proposed "prepackaged bankruptcy plan" for a subsidiary, leaving Johnson & Johnson to return to the tort system to challenge the lawsuits.
Airline Stocks Under Pressure
The airline sector faced increased scrutiny after Jefferies downgraded the ratings on three of the four major U.S. carriers due to weak consumer sentiment and tariff-related uncertainties. Southwest Airlines (LUV) saw a notable 5.9% decline following the downgrade to "underperform," particularly after the airline’s recent decision to implement a paid baggage policy, marking a departure from its traditional approach. Delta Air Lines (DAL) and American Airlines (AAL) also experienced losses of 2.7% and 2.4%, respectively.
Warner Bros. Discovery Struggles
In the entertainment industry, Warner Bros. Discovery (WBD) shares dropped by 4.8%. The company has been navigating challenges within its film studio and is currently restructuring by separating its cable television properties from its streaming and studio divisions. Recently, the appointment of Anton Levy, an advisory director at General Atlantic, to the board of directors highlights ongoing attempts to bolster leadership during these tumultuous times.
As the market adjusts to new economic realities and corporate developments, traders and investors alike will remain vigilant regarding upcoming announcements and their potential impacts.