NEW YORK (AP) — Most U.S. stocks rose on Tuesday after encouraging inflation data, but losses in Eli Lilly and Company and other influential stocks kept indexes in check.
The S&P 500 rose 0.1%, with three-quarters of stocks in the index gaining. The Dow Jones Industrial Average rose 221 points, or 0.5%, and the Nasdaq Composite fell 0.2%.
Stocks were boosted by a report showing that U.S. wholesale inflation was not as high as economists expected last month. That's an encouraging sign ahead of a report released Wednesday that will show the extent of inflation U.S. consumers faced at gas stations, grocery stores and drive-in lots in December.
Remaining high inflation data and better-than-expected U.S. economic data sent Wall Street into a weeks-long slump, pulling it further away from dozens of record highs set last year. The concern is that all the strong data will convince the Fed to reduce aid this year by lowering interest rates.
The Fed has suggested it may cut interest rates only twice in 2025, down from its previous forecast of four. Speculation is growing about whether the Federal Reserve may cut interest rates zero times this year.
These issues caused Treasury yields to rise sharply in the bond market, adding to pressure on the stock market. The rise in yields slowed after the wholesale inflation update.
The 10-year Treasury yield remained at 4.78%, unchanged from Monday night. It was lower than 3.65% in September.
The yield on the two-year Treasury note, which more closely tracks expectations for Fed action, fell to 4.36% from 4.39%.
On Wall Street, KB Home's latest quarter profit beat analysts' expectations, sending shares up 4.8%. Rising Treasury yields have made mortgages more expensive, but CEO Jeffrey Metzger said buyers "continue to demonstrate a desire to own a home and housing market conditions have improved relative to last year."
Metzger said faster construction times helped the company deliver more homes in the three months to November.
H&E Equipment Services shares more than doubled to $90 after United Rentals said it would acquire its smaller rival for $92 a share in cash. The deal values H&E, which leases aerial work platforms, earthmoving equipment and other products, at $4.8 billion, including about $1.4 billion in net debt.
United Rentals rose 5.9%.
The index swung between gains and losses throughout the day, largely due to losses in several large-cap tech stocks. Nvidia fell 1.1% and is the second-heaviest weight in the S&P 500.
The only stock that was a bigger drag on the market was Eli Lilly, which fell 6.6% after the company said it expected revenue in the final three months of 2024 to be lower than previously forecast.
CEO David Ricks said revenue from Eli Lilly's Mounjaro diabetes treatment, Zepbound obesity injection and other products in the incretin market grew 45% last quarter, but the growth was not as expected.
Signet Jewelers was also a loser on the market, down 21.7%. The diamond seller said sales on last year's peak shopping day before Christmas were lower than expected. Chief financial and operating officer Joan Hilson said shoppers' focus on low-priced fashion gifts "exceeds even expectations in a continued competitive environment."
As earnings season approaches, several of the largest U.S. financial companies will report their latest results on Wednesday, including JPMorgan Chase & Co. and Wells Fargo & Co. Reports like this always get a lot of attention, but this time, companies may be facing even more pressure.
If Treasury yields continue to rise, either stock prices will need to fall, or companies will need to generate greater profit growth to compensate.
On Tuesday, the S&P 500 rose 6.69 points to 5,842.91. The Dow Jones Industrial Average rose 221.16 points to 42,518.28, while the Nasdaq Composite fell 43.71 points to 19,044.39.
On foreign stock markets, with few exceptions, indexes were higher across much of Europe and Asia.
Japan's Nikkei 225 index fell 1.8% after the holiday on Monday, but Chinese stocks strengthened, with Hong Kong stocks rising 1.8% and Shanghai stocks rising 2.5%.
Crude oil prices fell, giving up some of the strong gains in recent weeks, which also added to inflationary pressures.
U.S. benchmark crude oil fell 1.7% to $77.50 a barrel. Brent crude, the international standard, fell 1.3% to $79.92 a barrel.
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AP Business Writers Yuri Kageyama and Matt Ott also contributed.