Key Highlights

● The drugmaker closed at a record high, leading health care in the S&P 500.

● Third-quarter Revenue reached $24.40 billion, well above the $22.61 billion expected.

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

● Adjusted Earnings guidance was trimmed on acquired research charges.

Eli Lilly (NYSE:LLY) charged to a record close on Thursday, powering health care to the top of the S&P 500's sector rankings after the drugmaker blew past third-quarter forecasts and sharply raised its full-year sales outlook.

A record close for a heavyweight

Eli Lilly closed at $1,373.70 on October 29, an all-time high, according to market data. Because Lilly is one of the most valuable companies in the index, the move did more than lift a single ticker: it helped cushion the benchmark against a punishing selloff in technology and was among the top positive contributors to the S&P 500 on the day.

The drugmaker reported before the opening bell. Revenue for the third quarter reached $24.40 billion, according to media reports, soaring from a year earlier and comfortably above the $22.61 billion analysts had expected. Adjusted Earnings Per Share were $7.48, against a consensus of $6.26.

Guidance: billions higher

The centerpiece of the report was the outlook. Lilly raised its 2026 revenue guidance to $91 billion to $92 billion, up from its previous range of $85 billion to $87 billion. That is an upgrade of about $5 billion to $6 billion in expected sales in a single step.

Market commentary said Demand was led by Zepbound and Mounjaro, the company's blockbuster treatments for obesity and type 2 diabetes.

Not every line was perfect

There were blemishes. Lilly trimmed its adjusted earnings-per-share guidance for 2026 to $35 to $36, from $35.50 to $36.50, reflecting $4.57 a share in charges for acquired in-process research and development, according to media reports. Such charges typically arise when a company buys or licenses experimental drugs. The same reports said sales of Foundayo fell short of expectations.

Investors largely looked past those details, focusing instead on the sheer scale of the revenue raise.

Health care leads a rotation

Lilly's surge was the flagship of a broad health-care rally. The sector was the best performer in the S&P 500 on Thursday, with Merck (NYSE:MRK) also rising after it beat estimates and lifted its full-year profit outlook. Pharmaceutical Exchange-traded funds climbed as drugmakers delivered strong numbers.

The rally in health care stood in stark contrast to the carnage in mega-cap technology. Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, erasing about $500 billion in market value, and communication services was by far the worst-performing sector. The S&P 500 slipped 23.59 points to 7,720.39, while the Nasdaq Composite sank 365.13 points to 26,184.72.

According to one report, investors rotated into health care, financials and real estate, which limited the damage to the broader indexes. "There's plenty of other places to go with your money outside of the AI trade that have pretty decent prospects," one market strategist said.

The macro mix

The session's economic data showed third-quarter GDP growing faster than expected and accelerating from the second quarter, while September PCE Inflation ran hot. The Federal Reserve held rates steady on Wednesday, with two officials dissenting in favour of a hike, and futures traders lean toward a December increase.

What to watch

The next questions for Lilly centre on execution: whether Supply of Zepbound and Mounjaro keeps pace with demand, how pricing evolves, and whether Foundayo's sales can recover from a soft quarter. Investors will also be watching for further acquired research charges, which have already nudged the company's earnings outlook lower.

With the stock at a record, attention will turn to whether health care's Leadership can persist as the market weighs the Fed's December 8–9 meeting and digests the remaining big earnings reports of the season, including AbbVie (NYSE:ABBV) on Friday.