The Dow Jones Industrial Average (^DJI 0.56%) had gained 0.56% by 3:15 p.m. EDT Monday. Microsoft (MSFT -1.27%) stock drove some of that move higher, jumping after the software company was awarded a massive government cloud computing contract, beating out rival Amazon.

Moving in the opposite direction was McDonald's (MCD 0.37%). While there were no new developments for the fast-food chain, investors continued to pummel the stock following a weak earnings report last week.

Microsoft wins coveted JEDI contract

While Amazon was widely expected to win the U.S. Department of Defense's Joint Enterprise Defense Infrastructure (JEDI) cloud contract, it was Microsoft that ultimately prevailed. The DOD announced on Friday that Microsoft had secured the 10-year contract worth as much as $10 billion, a blow to Amazon's image as the undisputed king of the cloud.

A cloud.

Image source: Getty Images.

Shares of Microsoft were up 2.4% as investors weighed the impact of the landmark deal.

Microsoft's Azure is the No. 2 provider of public infrastructure-as-a-service in the world, behind only Amazon Web Services. Microsoft produced $10.8 billion in revenue from its intelligent cloud segment during its first fiscal quarter, although that segment includes server software in addition to cloud services. Azure revenue was up 59% in Q1.

It's possible the JEDI contract result will be challenged by Amazon. The process was stained by politics, although Bloomberg reported that the Pentagon's inspector general said in a statement that it had "not found evidence that we believe would prevent the DoD from making a decision about the award of the contract."

Regardless of the circumstances, Microsoft's JEDI victory shows just how far the company has come in catching up to Amazon in the cloud.

McDonald's continues its post-earnings decline

Shares of fast-food giant McDonald's were down 1.5% as the market continued to punish the stock for a lackluster earnings report last week. McDonald's missed analyst estimates across the board when it reported its third-quarter results on Oct. 22, something that investors have yet to forget about.

Following Monday's slump, shares of McDonald's are now down more than 13% since peaking in August.

On an absolute basis, McDonald's results were mostly fine. Global comparable sales rose 5.9%, with a 4.8% increase in the U.S. Analysts were expecting faster growth in the U.S., but the company beat expectations globally.

The earnings miss may have been the biggest issue. McDonald's reported adjusted earnings per share of $2.11 in the third quarter, down from $2.16 in the prior-year period and $0.10 lower than analysts were expecting.

Shares of McDonald's have soared over the past few years, doubling since late 2015. The valuation has become stretched in that time, with the stock now trading for 24 times the average analyst estimate for full-year adjusted earnings. With earnings growth stuck in reverse, that premium valuation may not last.