WASHINGTON (dpa-AFX) - Following the lackluster performance seen in the previous session, stocks have moved sharply lower during trading on Thursday. The major averages have all moved to the downside, with the tech-heavy Nasdaq showing a particularly steep drop.
Currently, the major averages are just off their lows of the session. The Nasdaq is down 571.65 points or 2.4 percent at 23,285.80, the S&P 500 is down 89.67 points or 1.3 percent at 6,888.36 and the Dow is down 238.87 points or 0.5 percent at 48,776.73.
The sell-off on Wall Street comes amid a steep drop by shares of Microsoft (MSFT), with the software giant plummeting by 11.9 percent to its lowest intraday level in nine months.
Microsoft is under pressure after the company reported slowing cloud computing growth in its fiscal second quarter and provided disappointing third quarter operating margin guidance.
'Cloud computing is closely tied to the AI story and failure to either meet or beat previous growth rates raises the risk in the market's eye that some AI expenditure might be too high if demand is not also going through the roof,' said Dan Coatsworth, head of markets at AJ Bell.
Electric vehicle maker Tesla (TSLA) has also shown a significant move to the downside despite reporting better than expected fourth quarter results.
On the other hand, shares of Meta Platforms (META) have spiked by 7.2 percent after the Facebook parent reported better than expected fourth quarter results and forecast first quarter revenues above analyst estimates.
Shares of IBM Corp. (IBM) have also surged after the tech giant reported fourth quarter results that exceeded expectations on both the top and bottom lines.
Profit taking may also be contributing to the weakness in the broader markets after the S&P 500 briefly peeked above the 7,000 level for the first time during Wednesday's session.
Concerns about a partial government shutdown may also be weighing on Wall Street amid a dispute among lawmakers over funding for the Department of Homeland Security.
Sector News
Software stocks are seeing substantial weakness amid the steep drop by Microsoft, with the Dow Jones U.S. Software Index plummeting by 9.5 percent to its lowest intraday level in nine months.
Software company ServiceNow (NOW) has plunged by 11.9 percent despite reporting better than expected fourth quarter earnings.
A sharp pullback by the price of gold is also contributing to significant weakness among gold stocks, resulting in a 5.9 percent nosedive by the NYSE Arca Gold Bugs Index.
Semiconductor, networking and computer hardware stocks have also moved sharply lower, contributing to the slump by the tech-heavy Nasdaq.
On the other hand, oil producer stocks are turning in a strong performance amid a surge by the price of crude oil, driving the NYSE Arca Oil Index up by 2.2 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday. Japan's Nikkei 225 Index closed marginally higher, while China's Shanghai Composite Index edged up by 0.2 percent and Hong Kong's Hang Seng Index climbed by 0.5 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is down by 1.9 percent, the French CAC 40 Index is up by 0.2 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.
In the bond market, treasuries have moved to the upside after seeing some early volatility. As a result, the yield on the benchmark ten-year note, which moves opposite of its price is down by 2.0 basis points at 4.231 percent.
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