Big Tech weighs on US stocks despite earnings beats, putting pressure on Apple ahead of results.
US equities fell shortly after the opening bell today, with the S&P 500 down about 0.8% as a sharp selloff in Microsoft weighed on major indexes. Microsoft shares dropped more than 11% in early trading, marking their steepest intraday decline since March 2020.
The selloff followed Microsoft’s fiscal second-quarter earnings report released after the bell on Wednesday. The company beat Wall Street estimates on both revenue and profit, with cloud revenue surpassing $50 billion for the first time.
Despite the strong results, investors reacted negatively amid concerns that cloud growth may be slowing and that AI-related capital spending continues to rise.
Microsoft has been one of the largest beneficiaries of the AI boom due to its early investment in OpenAI, briefly pushing its market capitalization above $4 trillion in July. The stock has since retreated as investors reassess the pace of returns from heavy AI infrastructure spending.
The Nasdaq Composite fell about 1.6% in early trading, dragged lower by Microsoft’s decline. Other large technology stocks also weakened, with Tesla shares down near 2% after the automaker reported its first-ever annual revenue decline.
The move has increased pressure on Apple, which is scheduled to report earnings after the bell on Thursday, as investors look for reassurance on growth across the broader technology sector.
