Microsoft Drags Wall Street Down Amid Gold Reversal/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Microsoft shares plunged, pulling Wall Street lower despite strong earnings, while gold prices reversed sharply after recent highs. The S&P 500 dropped 1.3%, with tech stocks like Tesla and ServiceNow also falling. Gold and silver saw major declines after months of rapid gains.
Wall Street and Gold Market Quick Looks
- Market Reaction: S&P 500 fell 1.3%, Dow dropped 307 points
- Microsoft Impact: Stock plunged 12% despite strong earnings
- Tech Sector Woes: Tesla and ServiceNow also reported sharp losses
- Gold Prices: Fell 3.2% after hitting record $5,600, now at $5,173
- Silver: Dropped 3.6%, following gold’s reversal
- Investor Concerns: High tech spending, slowing growth, AI payoff timeline
- Meta & IBM: Rose on earnings beats, Meta gained 7.6%, IBM up 5.3%
- Southwest Airlines: Surged 11.9% on strong 2026 forecast
- Precious Metals Trend: Gold nearly doubled in a year before snapback
- Fed Policy: Interest rate cuts paused amid stubborn inflation
- Bond Market: 10-year Treasury yield dipped to 4.22%
- Dollar Movement: Slight uptick against British pound
- Global Markets: Mostly higher; SK Hynix drove South Korea’s Kospi to record
Deep Look
Microsoft Stock Plunge, Gold Price Pullback Rattle Wall Street
NEW YORK — A sharp drop in Microsoft shares triggered a broad sell-off on Wall Street Thursday, dragging major indexes away from record territory. At the same time, gold prices suddenly reversed course after touching a new all-time high, suggesting a potential cooling in the months-long rally for precious metals.
The S&P 500 fell 1.3%, despite flirting with record highs earlier in the day. The Dow Jones Industrial Average lost 307 points, or 0.6%, while the tech-heavy Nasdaq tumbled 2.3% as of mid-morning trading.
Microsoft was by far the biggest drag on the market, with shares plunging 12%—on track for their worst single-day performance since the COVID crash in 2020. This came despite the company reporting better-than-expected earnings and revenue. Investor anxiety centered instead on Microsoft’s aggressive spending, potential deceleration in its Azure cloud business, and uncertainty over how long its investments in artificial intelligence will take to yield significant profits.
Tesla also added pressure to the market, dropping 2.9%. Although the company beat earnings estimates, its profits fell sharply compared to the previous year. CEO Elon Musk urged investors to shift focus away from declining vehicle sales and toward longer-term projects like autonomous robotaxis and humanoid robots.
Elsewhere in the tech sector, ServiceNow fell 11.6%, continuing a downward trend that started in summer. The company also topped profit expectations, but that wasn’t enough to buoy its stock.
Despite the market slump, some individual stocks performed well. Meta Platforms rose 7.6% after posting earnings that surpassed expectations. The company announced it would continue investing heavily in artificial intelligence. IBM gained 5.3% following a strong earnings report. Southwest Airlines soared 11.9% despite a quarterly profit miss, offering a bullish forecast for 2026 as it implements operational changes like baggage fees and assigned seating.
Meanwhile, volatility returned to the precious metals market. Gold, which had climbed rapidly and crossed $5,000 earlier in the week for the first time, surged to nearly $5,600 in early trading before retreating 3.2% to $5,173.70. Silver also dropped 3.6% after a steep rally.
Gold prices had nearly doubled over the past year as investors sought safe-haven assets amid concerns over an overheated stock market, global political instability, tariff threats, and high government debt levels. While these risks haven’t disappeared, analysts say the rally had gone too far too fast, leading to Thursday’s sharp reversal.
The U.S. dollar, which has weakened considerably over the past year, in part due to those same global risks, saw slight gains Thursday against currencies like the British pound.
In the bond market, yields moved modestly lower. The 10-year Treasury yield dipped to 4.22% from 4.26% a day earlier, reflecting investor uncertainty about future interest rate policy.
The Federal Reserve announced Wednesday it will pause its interest rate cuts after three consecutive reductions in late 2025. Inflation remains above the Fed’s 2% target, complicating its ability to further reduce rates without fueling price instability. Lower rates also tend to weaken the dollar, which can aid U.S. exporters. Former President Donald Trump has been vocal in his calls for lower interest rates, arguing they would stimulate growth and competitiveness.
Globally, stock markets showed greater resilience. European and Asian markets posted gains, with South Korea’s Kospi index up 1% and hitting another record. The rally was helped by strong performance from chipmaker SK Hynix, which has been buoyed by renewed demand for semiconductor products.
Despite turbulence in U.S. markets, analysts remain cautiously optimistic, citing solid earnings fundamentals and improving business outlooks in several sectors. However, the twin shocks of a tech pullback and gold reversal underscore the market’s fragility amid ongoing uncertainty about inflation, interest rates, and geopolitical risks.
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