How does Lily upset Gabriel in "The Dead" by James Joyce?
Gabriel tries to make small talk with the servant Lily as she helps him off with his coat. He condescendingly asks her if she is still in school, and when she says she is not, he responds gaily that she will surely be married soon. This is just jovial chit-chat, the kind of talk Gabriel thinks it is gallant to use to a young woman, so he is surprised when she responds bitterly and seriously that
The men that is now is only all palaver and what they can get out of you.
As Gabriel enters the party, he realizes that he is
discomposed by the girl's bitter and sudden retort. It had cast a gloom over him which he tried to dispel by arranging his cuffs and the bows of his tie.
This overreaction foreshadows Gabriel's cluelessness with his own wife later and shows that it matters greatly to him that women fulfill his predefined expectations of how they should act. His fragile ego has little tolerance for women having minds of their own and not simply existing to reflect back his own needs and desires.
When Gabriel makes a comment about expecting to attend her wedding someday, Lily makes a comment about how men today just want things from women and how they are all talk. This is a deeper level of confidence than Gabriel was expecting, and he feels embarrassed, like he accidentally said something he didn't mean to or touched on a sensitive subject by accident. Lily's sharp response and his attempt to cover it by giving her money are what upset Gabriel.