Eli Lilly stock gains more than 3% as investors shift from tech to healthcare

Eli Lilly $LLY stock rose more than 3% on Thursday as healthcare stocks led the S&P 500 higher and several tech stocks fell.

The S&P 500 finished at 7,744.06, a 0.33% advance, while the Nasdaq $NDAQ edged up 0.08% to 26,713.03 and the Dow Jones Industrial Average jumped 1.08% to 52,177.69. Of the 11 S&P 500 sectors, eight posted gains, with healthcare out front at 1.84%.

Eli Lilly, UnitedHealth $UNH, and other healthcare and consumer names attracted money from investors seeking distance from AI-related stocks, according to Reuters. UnitedHealth stock added 2.8%, and Walmart $WMT stock rose 1.4% after rating upgrades from Deutsche Bank, according to Reuters.

AbbVie, Eli Lilly and Gilead $GILD Sciences all finished near all-time highs, as investors sought the reliable returns of large, diversified pharmaceutical companies, according to MarketWatch.

Tech stocks lagged. Nvidia $NVDA stock dipped 1.8%, Dell $DELL Technologies stock dropped 6.9%, and Hewlett Packard Enterprise stock fell 7.1%. The Philadelphia semiconductor index lost 0.9%, marking its seventh straight daily decline.

The sell-off in tech reflected concern about AI-focused companies carrying heavy debt burdens at a time when borrowing costs are climbing, according to Reuters.

"The cost to finance everything, whether it be a new single-family house or a giant dataa center, is going up, and that has implications for lots of stuff in the stock market," said Jed Ellerbroek, portfolio manager at Argent Capital Management, according to Reuters. "The best performing stocks today are the non-cyclical, defensive businesses."

Thursday's government report showed September producer prices surged by the largest margin in four and a half years. The 10-year Treasury yield retreated but stayed near multiyear highs. According to CME $CME's FedWatch tool, market participants now put the odds of a Federal Reserve rate increase by December at 67%, compared with 62% the day before.

The S&P 500 fell 1.1% on Wednesday and the Nasdaq dropped 1.9%, the biggest one-day declines for both indexes since July. September consumer prices ran 3.7% above year-earlier levels, and AI-linked stocks sold off.