Warren Buffett’s Berkshire Hathaway performed better than the S&P 500 during a tough week for the stock market. Investors turned to the safety of the cash-rich company as President Donald Trump’s aggressive tariffs caused chaos on Wall Street. Class B shares of the Omaha-based parent company of Geico Insurance and BNSF Railway dropped 6.2% last week.
This was less than the 9.1% fall in the S&P 500 and a 10% drop in the tech-heavy Nasdaq Composite. Even with these market conditions, Berkshire Hathaway, which focuses on the U.S. and owns large manufacturing, energy, and retail businesses, is still up about 9% this year. The stock is also the only one of the ten most prominent companies in the S&P 500 still trading above its 200-day moving average.
According to Rich Ross, head of technical analysis at Evercore ISI, this is an important momentum indicator. “While the 200-day moving average isn’t everything, it is important, and BRK/B is the only ‘Top 10’ stock in the S&P above it,” Ross said. Berkshire is doing well at a time when Trump’s surprising move to start a global trade war has shaken the economic outlook.
Berkshire navigates volatile market shifts
In response, the stock market went into a tailspin, with the S&P 500 plunging 10% in just two sessions. The blue-chip Dow Jones Industrial Average had its first-ever back-to-back losses of more than 1,500 points.
Some investors looking for relatively safe places to hide find Berkshire appealing. This is because of the defensive nature of its huge insurance business and the company’s unmatched balance sheet. At the end of 2024, it had $334 billion in cash.
Josh Brown, CEO of Ritholtz Wealth Management, said Berkshire is one of the few stocks in the market right now that doesn’t depend on Trump’s unpredictable policies to survive. “It’s one of the biggest publicly traded companies in the world, with huge exposure to the U.S. economy obviously,” Brown said. “The market is correctly sorting out that there are certain companies that do not have to go hand in hand to the White House to get a carve-out, certain companies that do not live or die based on where the 10-year Treasury yield is, or what China does next, or how the Canadians feel.”
On Friday, the 94-year-old Buffett denied remarks allegedly made by him on social media.
This came after President Donald Trump shared a fan video on Truth Social that claimed the president was deliberately tanking the stock market, with Buffett’s endorsement. Buffett said he won’t comment on the markets or tariffs between now and Berkshire’s annual meeting on May 3.
Image Credits: Photo by Kelly Sikkema on Unsplash
