Key Highlights

● HCA climbed on October 29, rebounding after an earlier-week selloff.

● Third-quarter Revenue and adjusted Earnings beat Wall Street expectations.

● Management expects to land in the upper half of its 2026 guidance ranges.

● Health care was the S&P 500's top sector, led by Eli Lilly and Merck.

HCA Healthcare (NYSE:HCA) clawed back ground on Thursday as investors revisited the hospital operator's third-quarter beat after an earlier-week selloff, with health care leading the entire S&P 500.

Second thoughts, better mood

HCA Healthcare, the for-profit hospital operator, climbed on October 29, according to market commentary. The gain marked a rebound after the shares had sold off earlier in the week.

According to the same commentary, HCA's third-quarter results beat Wall Street's expectations on both revenue and adjusted earnings per share. The company also said it expects to land in the upper half of its guidance ranges for the year, and several brokerages raised their price targets on the stock in the wake of the report.

Why the stock bounced

The rebound illustrates a pattern common in volatile earnings seasons: an initial selloff followed by a reassessment. Buyers returned on Thursday as the market digested the details of the quarter, including the upbeat guidance language and analysts' revised targets.

Expecting to finish in the upper half of guidance ranges is a meaningful signal for a hospital chain, whose results depend on patient volumes, the mix of services provided and the reimbursement rates paid by insurers and government programmes. The guidance language signalled confidence from management about the rest of the year.

The best sector in the market

HCA's rebound came on a banner day for health care. The sector was the top performer in the S&P 500 on Thursday, propelled by Eli Lilly (NYSE:LLY), which rallied to an all-time high after raising its 2026 revenue guidance, and Merck (NYSE:MRK), which beat estimates and lifted its profit outlook. Pharmaceutical and broader health-care Exchange-traded funds climbed.

One source reported that investors rotated into health care, financials and real estate, a shift that limited losses in the major indexes. It was a necessary cushion: Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, wiping out roughly $500 billion in market value. The S&P 500 slid 23.59 points to 7,720.39, while the Dow dipped 132.54 points to 52,342.56 and the Nasdaq Composite lost 365.13 points to 26,184.72.

Breadth, however, was strong. More than 400 S&P 500 members rose, and the Russell 2000 gained 28.71 points to 2,859.22. One strategist said, "There's plenty of other places to go with your money outside of the AI trade that have pretty decent prospects."

Health care in a hot economy

Thursday's economic data showed third-quarter GDP growing faster than expected and accelerating from the second quarter, with consumer spending holding up. A strong economy and a solid labour market can support hospital volumes, as more people carry employer-sponsored insurance.

But Inflation remains a concern. September PCE inflation ran hotter than in August, and while the Federal Reserve held rates steady on Wednesday, futures markets lean toward further tightening in December. Hospital operators face rising costs for labour and supplies, so inflation can squeeze margins even when patient Demand is robust.

Not every health-care company had a smooth day. Medical device maker Stryker (NYSE:SYK) fell sharply in after-hours trading on Thursday after its results and guidance disappointed, a reminder that the sector's strength was not universal.

What to watch

Investors will watch whether HCA's patient volumes and pricing hold up enough to deliver on its upper-half guidance outlook. Labour costs, which are among the largest expenses for hospital operators, will be closely scrutinised, especially with Friday's Employment Cost index set to offer a fresh reading on wage growth.

Policy developments around insurance coverage and government reimbursement remain an important variable for hospital stocks, particularly with the US midterm elections taking place on November 3.