Microsoft's disappointing earnings report is weighing heavily on the stock market today. The Nasdaq has fallen 1.62% and the S&P 500 is down 0.76% as traders reckon with a mixed tech earnings bonanza from Wednesday night.
Microsoft shares slid about 10% on Thursday following an earnings report that disappointed some investors, prompting the stock's sharpest daily decline since March 2020. The company had $37.5 billion in quarterly capital expenditures and finance leases, above Wall Street's $34.3 billion consensus. What happened? The all-important growth statistic for Azure and other cloud services came in at 39%, below StreetAccount's 39.4% consensus. Even though Microsoft reported beat earnings on Jan 28, 2026 with an EPS of $4.14 vs. $3.86, investors fixated on the cloud slowdown and hefty AI spending plans.
Not all of Big Tech stumbled. Meta Platforms rolled up 9% gains while Tesla added 2%. Meta beat on the top and bottom lines while also revealing that its AI-related capital expenditures this year will be between $115 billion and $135 billion, and investors took comfort in the company's latest results, which showed 24% year-over-year revenue growth, driven by online ads. Meanwhile, Visa beat earnings expectations on stronger spending, signaling consumer health remains solid despite market jitters.
The Federal Reserve paused rates Wednesday after three consecutive cuts, and "The decision to hold steady reflects a lack of reason to cut," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, noting that "The Fed likely reasons that economic growth is strong at around 3.5% to 4%, there's fiscal stimulus ahead, inflation is closer to 3% than the 2% target, the dollar is softening, financial conditions are very loose, and unemployment is low." Gold leaped again this morning to new all-time highs above $5,500 an ounce, and Silver climbed 4%. The tale of two markets continues: growth stocks facing headwinds from AI spending concerns, while safe havens like precious metals gain from geopolitical uncertainty.