Key Highlights

● Eli Lilly closed at a record $1,373.70 on October 29.

● Third-quarter Revenue of $24.40 billion far exceeded the $22.61 billion analysts expected.

● Lilly raised 2026 revenue guidance to $91 billion to $92 billion.

● Health care was the best-performing S&P 500 sector on Thursday.

Eli Lilly (NYSE:LLY) smashed third-quarter forecasts and raised its 2026 revenue outlook sharply, sending the drugmaker to an all-time high and leading health care to the top of the market.

A record on a down day

While Big Tech struggled on Thursday, Eli Lilly hit a new peak. Shares of Eli Lilly jumped to close at a record $1,373.70 on October 29, according to market data, one of the biggest contributors to the S&P 500 on a day when the index slipped.

The catalyst was a blockbuster third-quarter report, released before the opening bell, built on Demand for the company's weight-loss and diabetes drugs, Zepbound and Mounjaro, according to market commentary.

The numbers

Revenue soared to $24.40 billion, far above the $22.61 billion analysts expected, according to one report. Adjusted Earnings Per Share came in at $7.48, crushing the $6.26 consensus.

Lilly also raised its 2026 revenue guidance to $91 billion to $92 billion, up from $85 billion to $87 billion. That is a large upward revision for a company of Lilly's size, and it signalled confidence that demand will stay strong.

A couple of caveats

Not everything moved in the same direction. Lilly trimmed its adjusted EPS guidance to $35 to $36, from $35.50 to $36.50, because of $4.57 per share in acquired in-process Research and Development charges, according to one report. Such charges reflect payments for drug candidates bought from other companies, and they can weigh on reported earnings even when the underlying Business is growing.

Sales of Foundayo also missed expectations, the report said. Investors largely looked past both points, focusing instead on the scale of the revenue beat and the raised outlook.

Health care leads the market

Lilly's surge helped make health care the best-performing S&P 500 sector on Thursday. Merck (NYSE:MRK) rose after beating estimates and raising its full-year profit outlook, helped by Keytruda and Winrevair. HCA Healthcare (NYSE:HCA) also gained. The pharma ETF IHE climbed at midday, and another report said investors rotated into health care, financials and real estate.

That rotation was the day's defining theme. Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, losing about $500 billion of market value, and software stocks were hammered. Money moved toward companies with strong, visible earnings. One market strategist said, "Money is rotating within the market rather than leaving it."

One Investment strategist made a similar point: "There's plenty of other places to go with your money outside of the AI trade that have pretty decent prospects."

The broader market

The S&P 500 slipped 23.59 points to 7,720.39, its first decline in four sessions, but more than 400 members rose and eight of 11 sectors advanced. The S&P 500 also recorded 19 new 52-week highs. The Dow lost 132.54 points to 52,342.56, the Nasdaq Composite fell 365.13 points to 26,184.72, and the Russell 2000 gained 28.71 points to 2,859.22.

Not every health care stock joined the party. DaVita (NYSE:DVA) tumbled after an outlook that disappointed, according to market data, and Stryker (NYSE:SYK) slid in after-hours trading on a revenue miss.

What to watch

The key question for Lilly is whether Supply and demand for Zepbound and Mounjaro keep growing at this pace, and how the company's newer products perform after Foundayo's miss. Updates on Manufacturing capacity and pricing will be closely followed.

For the sector, more health care earnings arrive in the coming days, including AbbVie (NYSE:ABBV) on Friday. Friday also brings the Employment Cost Index, and the Federal Reserve's December 8–9 meeting, where futures lean toward a hike, will test whether the rotation into health care and other defensive areas has staying power.