The stock market has done well over the past several weeks, as investors have grown more comfortable with the prospects for long-term growth even as inflation has remained obstinately high. The Dow Jones Industrial Average (^DJI 0.67%) has performed the best of the major stock market indexes, and Wednesday's big Fed-spurred jump brought the Dow to within 7% of its all-time high in a colossal bounce from its bear market declines earlier in the year.

Yet the Dow isn't moving higher on Thursday, and it largely has Salesforce (CRM 1.27%) to blame. A steep drop in the share price of the customer relationship management software pioneer is weighing on the price-weighted value of the Dow, and it's just the latest example of the challenges that have faced software companies that rely on subscription-based revenue  for a large portion of their overall sales.

Salesforce's impact on the Dow

As of early Thursday afternoon, shares of Salesforce were down almost 10%. The roughly $15 drop in the CRM software provider's stock price represented more than 100 points of downward pressure on the Dow, making it responsible for the majority of the average's 170-point drop as of 1 p.m. ET.

The sharp move in Salesforce stock came after the software company announced its results for its fiscal third quarter, which ended Oct. 31. Although the numbers showed some signs of strength, investors were more concerned with the possibility that its growth could slow.

Salesforce did deliver robust sales growth. Revenue of $7.84 billion was up 14% year over year, even as adverse foreign currency impacts put 5 percentage points worth of downward pressure on its top line. Professional services revenue rose by 25%, while its larger subscription and support segment's revenue climbed at a 13% year-over-year pace. Remaining performance obligations climbed by 10% to $40 billion, with just over half of that amount representing current obligations due for completion in the near future.

In addition, Salesforce was able to shore up its bottom line. Although a large income tax provision pushed its unadjusted net income down by more than half from year-earlier levels, adjusted earnings of $1.40 per share compared favorably to the $1.27 per share Salesforce posted at this time last year. That was also a welcome departure from weakness earlier in the year, as even with this solid quarter in the books, Salesforce's adjusted earnings for the first nine months of the current fiscal year are 10% below where they were over the same period last year.

Another leadership transition for Salesforce

Also of concern to Salesforce shareholders was the announcement that it's about to go through another leadership transition. Co-CEO and board Vice Chairman Bret Taylor will step down from those positions as of Jan. 31. That will leave Chairman and co-CEO Marc Benioff as the sole chief executive officer.

Taylor joined Salesforce when it acquired his collaboration software platform, Quip, in 2016. Before that, he had an illustrious career that included formative work as chief technology officer of Meta Platforms following its acquisition of his FriendFeed business. He also worked with Alphabet as a co-creator of Google Maps.

Nevertheless, news of that leadership transition likely isn't the major factor driving Salesforce's stock price down Thursday. In the current market environment, software companies have seen their shares hit hard even after they release promising quarterly reports. Given investors' uncertainty about whether tech spending will come under greater pressure if macroeconomic conditions deteriorate, it's possible that Salesforce could keep dragging on the Dow in 2023 -- even if its long-term prospects eventually lead to a sizable turnaround for patient shareholders.