Microsoft's Sharp Decline Pulls U.S. Markets from Record Territory
The U.S. stock market retreated from its record heights on Thursday, dragged down by a significant plunge in Microsoft shares, marking the tech giant's worst trading day in years. Concurrently, gold and silver prices experienced dramatic swings following their recent historic surges, adding to the day's financial turbulence.
Tech Giant's Tumble Overshadows Strong Earnings
The S&P 500 index sank 0.7% after briefly flirting with its all-time high earlier in the morning. The Dow Jones Industrial Average declined by 101 points, or 0.2%, as of 1:29 p.m. Eastern time, while the Nasdaq composite fell 1.4% lower. Microsoft emerged as the heaviest weight on the market, tumbling 12.1% despite reporting stronger profit and revenue for the latest quarter than analysts had anticipated.
Investors focused instead on Microsoft's substantial investment expenditures, concerns about potential slowing growth in its Azure cloud business, and questions regarding how long its aggressive push into artificial-intelligence technology will take to translate into substantial profits. The stock is on track for its worst performance since the market's COVID crash in 2020, and it was responsible for more than two-thirds of the S&P 500's overall drop.
Mixed Corporate Performance Across Sectors
Tesla also contributed to market pressure, falling 2.3% after delivering a quarterly profit that exceeded analyst expectations but was sharply lower than results from a year earlier. Company leader Elon Musk has been attempting to redirect investor attention from flagging car sales toward Tesla's initiatives in robotaxis and robotics.
Companies across the market face pressure to deliver at least solid profit growth following record-setting runs for their stock prices. ServiceNow dropped 12.2% even after reporting stronger-than-expected quarterly profit, with analysts praising the performance but unable to halt a slide that has been underway since summer.
Within the S&P 500, stocks were nearly evenly split between gainers and losers. Meta Platforms led the gainers with a 9.9% rally after topping profit expectations, despite continuing its massive investments in AI. IBM climbed 4.6% after surpassing analysts' expectations for both profit and revenue, while Southwest Airlines soared 15.8% higher despite falling short of profit forecasts, buoyed by an optimistic 2026 earnings forecast following business changes like charging baggage fees and implementing assigned seating.
Precious Metals Experience Wild Price Swings
Some of the most dramatic action occurred in precious metals markets. Gold's price rallied near $5,600 per ounce in the morning before suddenly and briefly dropping back below $5,200, settling most recently at $5,386.10, up 0.9% from the prior day. This volatility follows Monday's milestone when gold topped $5,000 for the first time, having nearly doubled over the last 12 months.
Silver experienced a similar sudden reversal of momentum during its own feverish run. Precious metals had been surging as investors sought safer assets while weighing various risks, including what critics call an expensive U.S. stock market, political instability, tariff threats, and heavy government debt loads worldwide.
However, safety comes at a price when assets become expensive. The huge run for gold and silver raised criticism that their prices had advanced too far, too fast, making them due for a pullback. Even bitcoin, often pitched as "digital gold," fell sharply, sinking more than 6% toward $83,000.
Broader Financial Market Context
The U.S. dollar has seen its value decline over the last year due to many of the same risks that drove gold's price higher, but it held relatively steady against the British pound, euro, and other currencies on Thursday. In the bond market, the yield on the 10-year Treasury dipped to 4.23% from 4.26% late Wednesday.
The Federal Reserve decided Wednesday to at least pause cuts to its main interest rate, following three consecutive rate cuts to close out 2025 in an attempt to shore up the job market. Inflation remains stubbornly above the central bank's 2% target, helping keep the Fed on pause, as lower rates could potentially worsen inflation and further undercut the U.S. dollar's value, which would benefit U.S. exporters.
President Donald Trump has been pushing aggressively for lower rates and again criticized the Fed's chair personally on Thursday for being "too late" to cut. In international markets, indexes were mixed across much of Europe and rose in Asia, with South Korea's Kospi climbing 1% to another record, lifted in part by chipmaker SK Hynix.
