Stock market today: Drops for Lilly and Big Tech weigh on Wall Street, even as most stocks rise

NEW YORK (AP) — Drops for Eli Lilly and other influential companies are weighing on U.S. indexes Tuesday, even though most of the market is rising following an encouraging update on inflation.

The S&P 500 was down 0.2% in afternoon trading, despite gains for the majority of stocks in the index. The Dow Jones Industrial Average was down 2 points, or less than 0.1%, as of 1:01 p.m. Eastern time, and the Nasdaq composite was 0.4% lower.

Stocks initially rose in the morning after a report showed inflation at the U.S. wholesale level wasn’t as high last month as economists expected. It’s an encouraging signal ahead of a report coming Wednesday, which will show how much inflation U.S. consumers faced at gasoline pumps, grocery price registers and auto lots in December.

Stubbornly high readings on inflation and a run of better-than-expected updates on the U.S. economy have sent Wall Street into a weekslong rut, pulling it further from the dozens of all-time highs set last year. The fear is that all the strong data will convince the Federal Reserve to deliver less relief this year through lower interest rates.

The Fed has already hinted it’s likely to cut rates just two times in 2025, down from an earlier projection of four. But speculation is growing about whether the Fed may not cut rates at all this year.

Such questions have sent Treasury yields sharply higher in the bond market, which cranks up the pressure on the stock market, but yields slowed their ascent following the update on wholesale inflation.

The yield on the 10-year Treasury rose to 4.81% from 4.78% late Monday after a couple oscillations in the morning. It was below 3.65% in September.

The two-year Treasury yield, which more closely tracks expectations for Fed action, edged down to 4.38% from 4.39%.

On Wall Street, KB Home rose 3.2% after delivering a better profit for its latest quarter than analysts expected. The rise in Treasury yields has made mortgages more expensive, but CEO Jeffrey Mezger said buyers nevertheless “continued to demonstrate a desire for homeownership and housing market conditions improved relative to last year.”

Mezger said faster build times helped the company deliver more homes in the three months through November.

H&E Equipment Services more than doubled to top $90 after United Rentals said it will buy its smaller rival for $92 per share in cash. The deal values H&E, which rents aerial work platforms, earthmoving equipment and other products, at $4.8 billion, including roughly $1.4 billion of net debt.

United Rentals rose 4.3%.

Even though the majority of stocks were climbing, a 1.8% drop for Nvidia and other highly influential Big Tech stocks reined in indexes’ gains.

So did Eli Lilly’s fall of 7.4% after it said it expects to report weaker revenue for the last three months of 2024 than previously forecast.

CEO David Ricks said last quarter’s 45% growth in Lilly’s revenue for its Mounjaro diabetes treatment, Zepbound obesity injections and other products in the incretin market wasn’t as big as expected.

Also on the losing end of the market was Signet Jewelers, which tumbled 24.3%. The diamond seller said its sales in the peak shopping days leading up to Christmas this past holiday season were below its forecasts. Shoppers were focusing on lower-priced fashion gifts “even more than anticipated in a continued competitive environment,” said Joan Hilson, chief financial and operating officer.

Several of the nation’s biggest financial companies will report their latest results on Wednesday, including JPMorgan Chase and Wells Fargo, as earnings reporting season gears up. Such reports are always under the spotlight, but companies may be under even more pressure to impress this time around.

If Treasury yields continue to rise, either stock prices need to fall or companies need to produce bigger profit growth to make up for it.

In stock markets abroad, indexes were higher across much of Europe and Asia with a few exceptions.

Japan’s Nikkei 225 index fell 1.8% following a holiday on Monday, but indexes were much stronger in China where stocks rose 1.8% in Hong Kong and 2.5% in Shanghai.

Crude oil prices fell to give back some of their strong gains in recent weeks, which had also been cranking up the pressure on inflation.

Benchmark U.S. crude eased 0.9% to $76.59 per barrel. Brent crude, the international standard, fell 0.9% to $80.26 per barrel.

___

AP Business Writers Yuri Kageyama and Matt Ott contributed.

Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.