Stock market today: Nasdaq edges back from its record as chip companies and Eli Lilly slump

NEW YORK (AP) — U.S. stock indexes edged lower Wednesday after drops for Eli Lilly and chip companies overshadowed a jump for Google’s parent company.

The S&P 500 slipped 0.3% after drifting between small gains and losses several times, though it’s still near its all-time high set earlier this month. The Dow Jones Industrial Average edged down by 91 points, or 0.2%, while the Nasdaq composite slipped 0.6% from its own record set the day before.

Alphabet climbed 2.8% after beating analysts’ forecasts for profit in the latest quarter, thanks largely to the performance of its Google business. It’s the latest of the highly influential group of stocks known as the “Magnificent Seven” to top high expectations for growth. They’ll need to, because critics say their prices have climbed too quickly, even if artificial-intelligence technology is creating a new boom.

Computer chip companies have been some of the biggest winners of the AI rush, but Advanced Micro Devices helped drag down stocks across the industry after reporting profit for the latest quarter that only matched analysts’ expectations. It also gave a forecasted range for revenue for the end of 2024 whose midpoint was a bit below what analysts were estimating. AMD’s stock sank 10.6%.

Nvidia, a chip giant that’s rocketed to become one of Wall Street’s largest most influential stocks, fell 1.4% and was one of the heaviest weights on the S&P 500.

One of the few stocks to hurt the index nearly as much was Eli Lilly, which sank 6.3% amid concerns about two of the drug maker’s blockbuster products: diabetes treatment Mounjaro and weight loss counterpart Zepbound.

Eli Lilly reported weaker results for the latest quarter than analysts expected, as pharmaceutical wholesalers burned through inventories they had built up in previous quarters. Lilly cut its forecast for profit over the full year of 2024.

Also falling was Trump Media & Technology Group, the company behind former Donald Trump’s Truth Social platform. It dropped 22.3% for the worst loss since taking its place on the Nasdaq stock market following a merger with another company in March. The stock is notoriously volatile, and it had been rallying strongly over the last month, up to $40 from roughly $12.

Among the biggest movers on Wall Street, Reddit soared 42% after the company surprised investors and analysts and reported a profit.

Super Micro Computer lost nearly a third of its value, 32.7%, after Ernst & Young resigned as its registered public accounting firm. A prominent investor, Hindenburg Research, published a report in August that accused the company of accounting red flags and other issues, which CEO Charles Liang later said contained false or inaccurate statements.

All told, the S&P 500 fell 19.25 points to 5,813.67. The Dow dipped 91.51 to 42,141.54, and the Nasdaq composite slipped 104.82 to 18,607.93.

In the bond market, yields edged higher following the latest readings on the U.S. economy. Growth for the overall economy slowed during the summer from the spring, according to a preliminary estimate by the U.S. government. But the performance was slightly better than economists expected.

Recent hurricanes that struck the United States could lead to rebuilding that causes stronger growth in the fourth quarter but “the signal through the noise will likely be one of an economy that is still slowing, not reaccelerating,” according to Brian Jacobsen, chief economist at Annex Wealth Management.

A separate report on Wednesday suggested employers outside the government accelerated their hiring this month, when economists were forecasting a slowdown. It could raise optimism for Friday’s more comprehensive jobs report coming from the U.S. government. Economists expect that to show the pace of hiring nearly halved in October.

A slowing economy is no surprise after the Federal Reserve hiked interest rates sharply in hopes of braking enough on the economy to get inflation under control. The question is whether the Fed can help keep the economy out of a recession, now that it’s begun cutting interest rates to keep the job market humming.

A string of stronger-than-expected reports on the economy has raised such hopes, but it’s also forced investors to ratchet back expectations for how deeply the Fed will ultimately cut rates.

The yield on the 10-year Treasury rose to 4.28% from 4.26% late Tuesday and just 3.60% in the middle of last month.

Traders are largely expecting the Fed to cut its federal funds rate by a quarter of a percentage point at its next meeting next week, according to data from CME Group. That would be a step down from its cut of half a percentage point last month, which kicked off the Fed’s rate-easing campaign.

In stock markets abroad, indexes were mostly lower in Europe and Asia despite a 1% rise for Japan’s Nikkei 225 as the Bank of Japan began a two-day policy meeting.

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AP Writers Matt Ott and Zimo Zhong contributed.