Stocks Swing Lower as Eli Lilly, Fortinet Spiral

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published 7 August 2025

Stocks opened higher Thursday on strength in several chip stocks, which were boosted by assurances that President Donald Trump's proposed tariff on semiconductor imports would not apply to companies building in the U.S.

However, sentiment quickly shifted as market participants mulled over the latest round of earnings reports.

Late Wednesday, during a meeting in the Oval Office with Apple (AAPL, +3.2%) CEO Tim Cook – where the iPhone maker announced a new $100 billion investment in U.S. manufacturing over the next four years – Trump said he will impose a 100% tariff on chips being imported into the U.S.

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"But the good news for companies like Apple is if you're building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge," he added.

Semiconductor stocks including Nvidia (NVDA, +0.8%), Broadcom (AVGO, +0.7%) and Texas Instruments (TXN, 0.0%) jumped out of the gate Thursday in reaction, but finished the day well off their intraday highs.

Intel stock drops after Trump calls for CEO to resign

Trump also chimed in on Intel (INTC, -3.1%), though what he had to say did the embattled chipmaker no favors.

In a post on Truth Social, the president accused Intel CEO Lip-Bu Tan – who took the reins in March – of being "highly CONFLICTED" because of his alleged ties to China, and said he "must resign, immediately."

This follows a letter that Senator Tom Cotton (R-Ark.) sent to Intel's board chair, Frank Yeary, earlier this month to "express concern" over "the security and integrity of Intel's operations."

The CEO, according to Cotton, "reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms," including some he says that "have ties to the Chinese People's Liberation Army."

Eli Lilly sinks on disappointing weight-loss drug data

Eli Lilly (LLY) also finished in negative territory Thursday, sinking 14.1%. The pharmaceutical giant said the highest dosage of its oral obesity drug, orforglipron, helped patients lose 12% of their body weight in a late-stage trial – less than the 15% some Wall Street analysts expected.

Separately, the company reported higher-than-expected second-quarter results thanks to strong sales of its diabetes treatment Mounjaro and its weight-loss drug Zepbound. It also raised its full-year earnings and revenue outlooks.

Fortinet plunges 22% after earnings

Elsewhere on the earnings calendar, Fortinet (FTNT) stock sank 22.0% after the cybersecurity firm disclosed its second-quarter results.

While the company reported higher-than-anticipated earnings on in-line revenue, its third-quarter revenue outlook of $1.7 billion at the midpoint falls short of what Wall Street is expecting.

Additionally, many analysts were disappointed that Fortinet said its firewall refresh – where customers upgrade their existing product to a new version – is nearly halfway through.

"We have been Overweight (Buy) on Fortinet with the thesis that a large firewall refresh was coming," says Morgan Stanley analyst Keith Weiss. "Given that firewall refresh is now 40-50% complete, the catalyst we had been expecting is no longer present, causing us to downgrade the stock [to Equal Weight, the equivalent of Hold]."

Wall Street is mostly on the sidelines when it comes to the cybersecurity stock. Of the 44 analysts covering FTNT who are tracked by S&P Global Market Intelligence, seven say it's a Strong Buy, three have it at Buy, 32 say it's a Hold and two have it at Strong Sell.

Morgan Stanley downgrades Caterpillar to Sell

Morgan Stanley also chimed in on Caterpillar (CAT) after the construction giant reported lower-than-expected second-quarter earnings earlier this week.

Analyst Angel Castillo lowered his outlook on the Dow Jones stock to Underweight (the equivalent of Sell) from Equal Weight, saying shares are "priced to perfection."

The stock up more than 50% from their early April lows. "All the while," Castillo notes, "profitability and fundamentals (i.e. price/margins) have deteriorated further pointing to negative earnings revision risk."

And this skews risk to the downside for the blue chip stock, he adds. CAT finished the day down 2.5%.

As for the main indexes, the tech-heavy Nasdaq Composite rose 0.4% to 21,242, the broader S&P 500 gave back 0.08% to 6,340, and the blue-chip Dow Jones Industrial Average fell 0.5% to 43,968.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.