On Tuesday, the US equity markets experienced a decline in midday trading as investors reacted to a notable drop in producer price inflation that exceeded expectations. The tech-heavy Nasdaq index fell by 0.4%, settling at 19,004.2 points, while the S&P 500 dipped 0.3% to 5,815.3. Additionally, the Dow Jones Industrial Average decreased by 0.2%, reaching 42,204.5.
Notably, the healthcare and communication services sectors led the day’s decliners, whereas the utilities and materials sectors managed to emerge among the top gainers during the intraday session. In terms of economic indicators, the US Producer Price Index (PPI) recorded a 0.2% growth in December, marking a slowdown from the 0.4% increase observed in November.
This figure also fell short of the anticipated 0.4% gain according to a survey conducted by Bloomberg. When food and energy prices are excluded, the core Producer Price Index (core PPI) remained stable, lagging behind the expected 0.3% increase and reflecting only a 0.2% advance from the previous month. Year-over-year, the PPI showed an acceleration of 3.3% in December compared to a 3% increase in November, while the core PPI stood at a steady 3.5% year-over-year. Turning to US Treasury yields, most experienced a decline, with the 10-year yield decreasing by 1.3 basis points to 4.79%.
This change came after reaching an intraday 52-week high the day before. The two-year Treasury rate also saw a decline, falling 2.5 basis points to 4.38%, slipping from its highest level since late July. In the energy sector, West Texas Intermediate crude oil futures fell by 1.6%, settling at $77.55 a barrel, moving down from its peak level since mid-August. In corporate news, Eli Lilly ($LLY) announced on Tuesday that its Q4 revenue is projected to be approximately $13.5 billion.
This estimate came in below market expectations, with analysts surveyed by FactSet anticipating a figure of $13.93 billion. As a result, shares of Eli Lilly traded 7.2% lower during the intraday session, marking it as the worst performer in the S&P 500. Furthermore, United Rentals ($URI) has confirmed its agreement to acquire H&E Equipment Services (HEES) in an all-cash deal valued at around $4.8 billion, which includes about $1.4 billion of debt.
This acquisition reflects the equipment rental company’s strategic objective to enhance its operational capacity within the US market..