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U.S. stocks retreated from record highs on Thursday, with tech giant Microsoft leading the decline after investors reacted negatively to its latest earnings report despite beating profit expectations. Meanwhile, gold continued its remarkable ascent, reaching new all-time highs as investors seek safer assets amid market uncertainty.
The S&P 500 fell 1% after briefly approaching record territory earlier in the session. The Dow Jones Industrial Average dropped 174 points, or 0.4%, while the technology-heavy Nasdaq composite tumbled 1.8% by mid-morning trading.
Microsoft shares plunged 11.5%, marking the company’s worst trading day since the COVID-19 market crash in 2020. While the company reported stronger-than-expected profit and revenue figures, investors focused on concerns about heavy investment spending, potential slowdowns in its Azure cloud business, and uncertainty around when its artificial intelligence initiatives would translate into substantial profits.
Tesla added to market pressure, falling 2.1% after reporting quarterly profits that exceeded analyst expectations but showed sharp declines from the previous year. CEO Elon Musk has been urging investors to focus less on the company’s struggling car sales and more on future technologies like robotaxis and robots, a pivot that has yet to fully convince market participants.
The earnings season has put significant pressure on companies to deliver robust growth to justify lofty stock valuations. After record-setting runs for many equities, investors are scrutinizing results closely, with disappointments being severely punished.
ServiceNow exemplified this trend, dropping 11.4% despite posting better-than-expected quarterly profits. Analysts praised the company’s performance, but the results couldn’t halt a slide that began in summer.
Not all news was negative, however. Meta Platforms rallied 7.8% after exceeding profit expectations, even as the company indicated it would continue massive investments in artificial intelligence. IBM gained 5.7% after beating analyst expectations on both profit and revenue.
Southwest Airlines emerged as another winner, soaring 12.7% despite missing profit forecasts. Investors responded positively to the airline’s 2026 earnings forecast, which substantially exceeded analyst expectations. The company cited strong momentum following significant business changes, including the introduction of baggage fees and assigned seating.
Perhaps the most dramatic action occurred in precious metals markets, where gold approached $5,600 before settling at $5,393.00. Gold’s price has nearly doubled over the past 12 months and only surpassed $5,000 for the first time earlier this week. The precious metal’s surge reflects investors seeking safe-haven assets amid concerns about U.S. stock market valuations, political instability, tariff threats, and global government debt burdens.
The U.S. dollar, which has weakened considerably over the past year due to similar concerns, showed modest strength on Thursday, gaining against the British pound and several other currencies. In the bond market, the yield on the 10-year Treasury eased slightly to 4.24% from 4.26% the previous day.
The Federal Reserve announced Wednesday it would pause interest rate cuts after implementing three consecutive reductions to close out 2025, primarily to support the job market. The pause was influenced by inflation remaining stubbornly above the central bank’s 2% target, as lower rates could potentially exacerbate inflationary pressures.
Lower interest rates could further weaken the dollar’s value, which would benefit U.S. exporters—a point emphasized by former President Trump, who has advocated aggressively for rate cuts.
Overseas, European and Asian markets generally trended positive. South Korea’s Kospi index climbed 1%, reaching a new record partly driven by chipmaker SK Hynix, highlighting the ongoing global significance of the semiconductor industry amid the AI boom and digital transformation.
As earnings season continues, investors remain focused on whether corporate profits can justify current market valuations and navigate the complex landscape of inflation concerns, central bank policies, and geopolitical uncertainties.
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16 Comments
The market’s reaction to Microsoft’s earnings report underscores the challenges facing the tech sector as a whole. Investors are closely scrutinizing companies’ long-term strategies and their ability to adapt to changing market conditions.
Gold’s surge to new highs is a significant development, as it suggests that investors are increasingly turning to safe haven assets to mitigate risk in the current market environment.
The tech sector’s struggles are a reminder that even the industry’s titans are not immune to market pressures. Microsoft’s earnings report highlights the need for companies to carefully navigate the evolving business landscape and manage investor expectations.
Gold’s record-setting performance amidst the broader market uncertainty is a clear sign that investors are seeking stability in tangible assets. This trend could continue as long as the economic outlook remains volatile.
Microsoft’s heavy investment spending seems to be a concern for investors, even with the strong earnings. The market is clearly looking for more clarity on the company’s long-term AI strategy and its impact on profitability.
The gold market’s resilience in the face of these tech sector headwinds is quite remarkable. It’s a testament to the metal’s status as a reliable safe haven asset.
It’s interesting to see Microsoft’s earnings stumble weigh on the broader market, despite the company’s overall strong performance. Investors seem to be grappling with the uncertainty surrounding the tech sector’s long-term prospects, particularly in areas like AI and cloud computing.
The gold market’s resilience amidst these challenges is a testament to the metal’s enduring appeal as a safe haven asset. As market volatility persists, gold’s upward trajectory could continue to attract investor attention.
Interesting to see the market’s reaction to Microsoft’s earnings report despite the strong profits. Investors seem wary of the company’s spending and long-term AI plans. Meanwhile, gold continues to shine as a safe haven asset amidst the uncertainty.
Absolutely, gold’s surge to record highs reflects the broader market volatility. Investors are seeking shelter in precious metals as a hedge against economic risks.
The tech sector’s slide is weighing on the broader market, with Microsoft’s stumble leading the way. However, the gold rally suggests investors are playing it safe and diversifying their portfolios.
Gold’s record prices are certainly eye-catching. It will be interesting to see if this trend continues as market uncertainty persists.
It’s interesting to see Microsoft’s earnings report fail to impress the market, despite the company’s strong performance. Investors seem to be focused on the long-term challenges facing the tech sector, such as economic headwinds and the evolving AI landscape.
The gold market’s resilience in the face of these challenges is a testament to the metal’s enduring appeal as a safe haven asset. As market volatility persists, gold’s upward trajectory could continue.
The tech sector’s struggles are a reminder that even industry giants like Microsoft are not immune to market volatility. Investors will be closely watching the company’s next moves as it navigates the uncertain economic landscape.
Gold’s surge to new highs is a clear sign that investors are seeking refuge in tangible assets amid the broader market turbulence. This trend could continue as long as the economic outlook remains uncertain.