NEW YORK (AP) — A sharp drop for Microsoft is pulling the U.S. stock market away from its record heights on Thursday. Gold's price, meanwhile, keeps ripping to more records in its astounding run.
The S&P 500 fell 0.7% after flirting earlier in the morning with its all-time high. The Dow Jones Industrial Average was down 21 points, or less than 0.1%, as of 10:05 a.m. Eastern time, and the Nasdaq composite was 1.6% lower.
Microsoft was the heaviest weight on the market by far, and it sank 11.5% even though the tech giant reported stronger profit and revenue for the latest quarter than analysts expected. Investors honed in instead on how much Microsoft is spending on investments, whether growth in its Azure cloud business will slow and how long its push into artificial-intelligence will take to turn into big profits.
Tesla also weighed on the market after falling 1.8%. It also delivered a bigger profit for the latest quarter than analysts expected, but the results were still sharply lower than from a year earlier. Tesla’s leader, Elon Musk, has been urging investors to focus less on its flagging car sales and more on the company’s robotaxis and robots.
Companies across the market are under pressure to deliver at least solid growth in profits following record-setting runs for their stock prices. Stock prices tend to follow the path of corporate profits over the long term, and earnings need to rise to quiet criticism that stock prices have grown too expensive.
ServiceNow dropped 11.4% even though it reported a stronger profit for the latest quarter than expected. Analysts praised the performance, but it wasn’t enough to stop a slide for the stock that’s been underway since the summer.
Helping to work against such losses was Meta Platforms, which rallied 7.8% after topping profit expectations, even though it also said it will continue its massive investments in AI.
IBM was another winner and rallied 6.1% after surpassing analysts’ expectations for profit and revenue.
Southwest Airlines flew 12.2% higher even though its profit fell short of forecasts. It gave a forecast for earnings in 2026 that blew past analysts’ expectations, saying it’s seeing strong momentum after making big changes to its business like charging baggage fees and having assigned seating.
Some of the wildest action in financial markets was again for precious metals, as gold’s price rallied another 3.6% to $5,530.00 per ounce. It was only on Monday that it topped $5,000 for the first time. Gold’s price is up more than 25% for the young year so far and has roughly doubled over the last 12 months.
Its price has surged as investors look for safer things to own while weighing a wide range of risks, including a U.S. stock market that critics call expensive, political instability, threats of tariffs and heavy debt loads for governments worldwide.
The U.S. dollar has seen its value sink over the last year because of many of those same risks, and it was mixed Thursday against the euro, British pound, and other competitors.
U.S. Treasury yields held a bit firmer in the bond market. The yield on the 10-year Treasury edged down to 4.25% from 4.26% late Wednesday.
The Federal Reserve decided Wednesday to at least pause cuts to its main interest rate. That was after the Fed cut rates three times in a row to close out 2025 in an attempt to shore up the job market.
Helping to keep the Fed on pause is the fact that inflation remains stubbornly above the central bank’s 2% target. Lower rates can worsen inflation.
They could also further undercut the U.S. dollar’s value, which would help U.S. exporters. Trump has been pushing aggressively for lower rates.
In stock markets abroad, indexes rose across much of Europe and Asia.
South Korea’s Kospi climbed 1% for one of the world’s bigger moves, lifted to another record in part by chipmaker SK Hynix.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.