U.S. Stocks Mixed as Fourth-Quarter Earnings Boost Confidence

U.S. stock markets closed mixed with a positive boost from fourth-quarter earnings results. Investors are assessing mixed economic data ahead of key labor market reports. The Dow fell, while the S&P 500 and Nasdaq rose, indicating varied investor sentiment.

Date: 07-02-2025

AI Rating: 7

Stock Market Performance

The U.S. stock markets showed a mixed performance with the Dow Jones Industrial Average declining by 0.3%, due to uneven results across its components. In contrast, the tech-heavy Nasdaq Composite and the S&P 500 experienced gains, of 0.5% and 0.4%, respectively. This indicates a divergence in investor sentiment, possibly influenced by significant earnings reports from companies like Eli Lilly & Co., Philip Morris International Inc., and XPO Inc.

Earnings Per Share (EPS)

Notably, Eli Lilly & Co. reported an adjusted EPS of $5.32, exceeding the Zacks Consensus Estimate of $5.03, alongside a year-over-year growth of 114%. Philip Morris International Inc. also saw a rise in adjusted EPS to $1.55, surpassing the Zacks estimate and reflecting a 14% increase year-over-year. XPO Inc. similarly beat expectations with an EPS of $0.89, against a forecast of $0.62, indicating a positive earnings trajectory for these firms. These strong EPS results are likely to boost investor confidence and positively affect stock prices.

Revenue Growth

Eli Lilly's revenue rose to $13.53 billion, a 45% increase year-over-year, also exceeding expectations. Philip Morris reported net revenues of $9,706 million with a 7.3% increase, while XPO recorded revenues of $1.92 billion, also surpassing consensus estimates. Such robust revenue growth directly impacts the companies' market perceptions, and can lead to upward revisions in stock prices as investors respond positively to strong financial performance.

Market Reaction

Following these earnings reports, shares of Eli Lilly, Philip Morris, and XPO experienced notable increases of 3.4%, 11%, and 7.8%, respectively. The market's positive reaction to strong earnings amidst a mixed economic backdrop suggests that investors are willing to overlook some economic uncertainties in favor of strong corporate performance.

This report also highlights recent economic data, including increased initial jobless claims, which may bring some caution to the market. However, the strong fourth-quarter earnings results are likely to have a more dominant influence on stock performance in the near term.

Stocks: LLY PM XPO