The S&P 500 (^GSPC 0.24%) slipped 0.17% to 6,969.01 and the Nasdaq Composite (^IXIC 0.14%) fell 0.72% to 23,685.12 on tech weakness today. The Dow Jones Industrial Average (^DJI +0.02%) inched up 0.11% to 49,071.56, holding near record territory.
Market movers
Mega-cap tech dominated trading as Microsoft (MSFT 1.05%) fell 9.99% to $433.50. According to Bloomberg, the $357 billion wipeout was the second-largest loss in a single session. Strong results from Meta Platforms (META 3.12%) helped cushion broader index losses.
Software bellwether ServiceNow (NOW 0.54%) sank 9.94% to $116.73 in spite of Q4 earnings that beat analyst expectations. The selloff in software stocks continued, with Salesforce (CRM 2.77%) and Adobe (ADBE 6.82%) dropping on ongoing concerns that artificial intelligence (AI) could replace their services.
What this means for investors
Stocks dipped sharply this morning as markets digested yesterday’s after-the-bell earnings from Microsoft. The results beat analyst expectations, but its Azure cloud didn’t deliver as much as investors had hoped. Heavy AI spending is a big concern.
By the end of the day, the S&P 500 and Nasdaq had almost recovered, remaining close to their highs. Yesterday’s Fed decision to keep rates unchanged added some stability and Meta’s positive Q4 earnings offset Microsoft’s fall.
Meta beat expectations and gave optimistic forecasts for the next quarter. Unlike Microsoft, unease about excessive AI spending was balanced by cash generation in the rest of the business. Apple’s (AAPL 0.88%) earnings, which came after market close, surpassed expectations with huge iPhone demand.
