NEW YORK (AP) — The worst day for Microsoft in years is pulling the U.S. stock market away from its record heights on Thursday. The fever in the gold market may be breaking, meanwhile, as its price pulls back after hitting its latest all-time high.
The S&P 500 sank 1.3% after flirting with its all-time high earlier in the morning. The Dow Jones Industrial Average was down 307 points, or 0.6%, as of 10:45 a.m. Eastern time, and the Nasdaq composite was 2.3% lower.
Microsoft was the heaviest weight on the market by far, and it sank 12% 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.
Its stock is on track for its worst day since the stock market’s COVID crash in 2020.
Tesla also weighed on the market after falling 2.9%. It delivered a bigger profit for the latest quarter than analysts expected, but the results were 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 11.6% 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.
Still, slightly more stocks rose in the S&P 500 than fell. Leading them was Meta Platforms. The company behind Facebook, Instagram and WhatsApp rallied 7.6% after topping profit expectations, even though it also said it will continue its massive investments in AI.
IBM was another winner and rallied 5.3% after surpassing analysts’ expectations for profit and revenue. Southwest Airlines flew 11.9% 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.
Gold’s price rallied near $5,600 in the morning before falling back to $5,173.70, down 3.2%. It was only on Monday that it topped $5,000 for the first time. Gold’s price had nearly doubled over the last 12 months.
Silver, which has been caught in its own feverish upward run, fell 3.6%.
Prices for precious metals ad 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. But that incredible performance at the same time raised criticism that prices had gone too far and were due for a breather.
The U.S. dollar has seen its value sink over the last year because of many of the same risks that drove gold’s price higher, but the dollar edged higher against the British pound and some other competitors Thursday.
In the bond market, the yield on the 10-year Treasury fell to 4.22% 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.
