Stocks Fail To Rise Despite Benign Producer Inflation, 30-Year Treasury Yields Hit 5%, Ely Lilly Tumbles: What's Driving Markets Tuesday?

A cooler-than-expected December producer inflation report failed to ignite lasting gains on Wall Street Tuesday, reflecting lingering concerns about persistently high inflation among investors.

Early session advances across major indices faded into modest losses by midday trading in New York, as market participants exercised caution ahead of Wednesday's pivotal Consumer Price Index report and key fourth-quarter earnings from top Wall Street banks.

The Producer Price Index rose 3.3% year-over-year in December, accelerating from November's 3% increase but missing the 3.4% forecast. On a monthly basis, producer prices climbed 0.2%, slowing from November's 0.4% rise and falling short of the 0.3% consensus estimate.

Core PPI, which excludes volatile food and energy prices, increased 3.5% annually, matching November's pace but undershooting expectations of 3.8%. On a month-to-month basis, core inflation stagnated, showing zero growth compared to November's 0.2% increase, and coming in below forecasts for a 0.3% gain.

Bond yields continued to climb, underscoring persistent inflationary pressure. The 30-year Treasury yield advanced to 5%, its highest level since October 2023 and marking territory not seen since August 2007.

After a three-day rally, crude oil prices cooled. West Texas Intermediate fell 1% to $78 per barrel, as investors locked in recent gains.

Utilities and financials emerged as the session's strongest performers, while healthcare stocks were the largest drag on the market. Eli Lilly & Co. LLY plummeted 7.5% after the company issued a weaker-than-expected fourth-quarter sales forecast for its weight-loss drug Zepbound.

Peer Novo Nordisk A/S NVO slid 5% in sympathy.

CEO Dave Ricks revealed that Eli Lilly anticipates regulatory approval for its oral weight-loss treatment, orforglipron, by 2026, with pivotal data expected in mid-2025.

Bitcoin BTC/USD rose 1.5% on Tuesday, bouncing back after three days of largely flat trading.

Tuesday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day %chg
Russell 2000	2,194.61	0.0%
Dow Jones	42,241.81	-0.1%
S&P 500	5,818.04	-0.3%
Nasdaq 100	20,704.24	-0.4%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY eased 0.4% to $579.14.
• The SPDR Dow Jones Industrial Average DIA inched 0.2% down to $422.07.
• The tech-heavy Invesco QQQ Trust Series QQQ fell 0.6% to $502.89.
• The iShares Russell 2000 ETF IWM inched 0.1% higher to $217.45.
• The Utilities Select Sector SPDR Fund XLU outperformed, up 0.8%; the Health Care Select Sector SPDR Fund XLV lagged, down 1.8%.

Tuesday’s Stock Movers

• Chinese stocks rallied amid regulatory reassurance on markets. Shares of JD.com Inc. JD rose 4.6%, followed by gains in Baidu Inc. BIDU and PDD Holdings Inc. PDD, up 2.5% and 2.2%, respectively.
• Boeing Co. BA fell over 3% after announcing on Tuesday that it delivered 57 commercial aircraft in the fourth quarter of 2024, a sharp decline from 116 deliveries in the previous quarter.

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