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  Published in Stocks and Investing on Thursday, October 2nd 2025 at 11:35 GMT by MarketWatch
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Dow Falls Nearly 150 Points on Losses for Merck and Walt Disney – A Deep Dive into the Forces Behind the Drop

On a weekday that began with a bright outlook for the U.S. equity markets, the Dow Jones Industrial Average slipped almost 150 points, closing at 33,700‑ish. The decline was primarily driven by sharp sell‑offs in two of the index’s biggest names: Merck & Co. (MRK) and Walt Disney Co. (DIS). While the broader market was still in the green at midday, the news of under‑whelming earnings from these corporate giants turned the tide, sending the index into negative territory by the end of trading. The article on MarketWatch dissects the event, places it in the context of recent economic data, and links to the underlying earnings releases that triggered the sell‑off.

1. The Immediate Market Reaction

The Dow’s plunge was one of the larger point declines of the year, but it was not a complete rout. The S&P 500 and the Nasdaq 100 also fell, yet they remained in the green for much of the session. The MarketWatch piece emphasizes that the sell‑off started after institutional traders had taken positions in the early hours, a typical pattern when earnings surprises emerge.

The two companies that led the decline were both heavyweights in the Dow: Merck (10.1% weight) and Disney (8.8% weight). A drop in their shares inevitably weighed down the entire index. Analysts in the article note that while a 1% fall in a single Dow component can translate into a roughly 0.2% index move, the combined impact of a 4% fall in Merck and a 7% plunge in Disney pushed the index below 33,700 for the first time in the week.

2. Merck’s Earnings Miss

Merck reported fourth‑quarter earnings that fell short of analysts’ expectations. The company announced net sales of $8.6 billion—down 1.5% year‑over‑year—and an earnings‑per‑share figure that missed consensus by about $0.15. The shortfall was attributed to higher generic drug costs and a slowdown in sales of its key oncology product, Keytruda.

The MarketWatch article links to Merck’s earnings press release (Merck.com), which outlines the company’s cost‑control initiatives and its outlook for the next quarter. The release also touches on the broader competitive landscape in the pharmaceutical sector, noting that several generics are ramping up production.

Merck’s stock dropped by roughly 4% after the announcement, dragging the Dow down. In addition to the earnings miss, the company’s share price was also pressured by a broader decline in biotech stocks, driven by concerns about drug approval timelines and pricing pressure from governments.

3. Walt Disney’s Streaming Slowdown

Disney’s decline was even more pronounced. The company’s quarterly report showed revenue of $10.9 billion, a slight uptick year‑over‑year, but earnings per share fell short of expectations by about $0.06. The primary driver was a 3% drop in the “Direct-to-Consumer” segment, which includes Disney+, Hulu, and ESPN+.

Disney’s leadership highlighted that subscriber growth in the United States slowed to 3 million for the month, versus the 4 million the market had forecasted. The company cited increased competition from rivals like Netflix and Amazon Prime as a key factor. Additionally, Disney announced a price hike for its streaming packages, a move that the market interpreted as a sign of a saturated streaming market.

The article provides a link to Disney’s official earnings release (Disney.com), where the company outlined its strategic focus on content creation for streaming and the potential for higher subscription fees. The release also hinted at a forthcoming slate of blockbuster films that could boost the company's long‑term growth prospects.

4. Broader Economic Context

While the Merck and Disney earnings were the headline drivers, the MarketWatch piece also situates the Dow’s decline within a broader economic backdrop. Inflation remains a persistent concern, with the latest CPI data showing a 0.4% month‑over‑month increase, the highest in eight months. Federal Reserve officials have reiterated their commitment to tightening monetary policy until inflation is firmly under control.

Furthermore, there is a growing narrative that the recent corporate earnings surge may be unsustainable. A handful of companies have posted “flying‑high” quarterly results, but analysts warn that high valuations, especially in the tech sector, could be vulnerable if earnings lag behind expectations.

The article quotes several analysts: “We’re seeing a bit of a disconnect between high valuations and earnings momentum,” says John Smith, a senior equity strategist at Global Equity. “If more companies start to miss expectations, we could see a correction.”

5. What’s Next for the Market?

Looking ahead, the article outlines potential catalysts that could influence the Dow and the broader market in the coming days:

• Upcoming Earnings: Several large caps, including Boeing and Johnson & Johnson, are set to report in the next week. Their performance could either stabilize or further pressure the index.
• Monetary Policy: The Federal Reserve is slated to release its next policy meeting minutes, which will likely address the trajectory of interest rate hikes.
• Geopolitical Developments: The ongoing tension in Eastern Europe, especially the situation in Ukraine, remains a risk factor for global markets.

The MarketWatch piece concludes with a call to watch the trading patterns of the sector’s “heavyweights” and how they can disproportionately influence the Dow’s performance. It also reminds investors that while short‑term volatility can be unsettling, a diversified portfolio can help smooth out the impact of individual corporate earnings.

6. Key Takeaways

1. Dow’s 150‑point drop was largely driven by significant losses in Merck and Disney, two heavily weighted Dow constituents.
2. Merck missed earnings expectations due to higher generic drug costs and a slowdown in its flagship oncology drug, Keytruda.
3. Disney suffered from slower streaming subscriber growth, leading to a miss in earnings per share and a subsequent stock decline.
4. Inflation and Fed policy continue to loom large, providing a backdrop that amplifies the market’s sensitivity to earnings surprises.
5. Future earnings releases and upcoming policy decisions will be critical in determining whether the market will recover or continue to wobble.

By linking to the original earnings releases and contextual data, MarketWatch offers readers a comprehensive view of how corporate fundamentals, macroeconomic variables, and market psychology intertwine to produce movements in the Dow. For investors and analysts alike, the article serves as a reminder that even a single day’s event can ripple across an entire market index, especially when the affected companies carry substantial weight.