U.S. stocks ended mixed on Thursday, as a plunge for Microsoft and looming U.S. government shutdown fears pulled Wall Street away from record heights.
The Dow Jones Industrial Average rose 55.96 points, or 0.11 percent, to 49,071.56. The S and P 500 sank 9.02 points, or 0.13 percent, to 6,969.01. The Nasdaq Composite Index shed 172.327 points, or 0.72 percent, to 23,685.12.
Seven of the 11 primary S and P 500 sectors ended in green, with communication services and real estate leading the gainers by rising 2.92 percent and 1.42 percent, respectively. Meanwhile, technology and consumer discretionary led the laggards by losing 1.86 percent and 0.64 percent, respectively. The session's primary downward pressure came from Microsoft, which saw its shares crash nearly 10 percent, its worst daily performance since the market crash in March 2020. The software giant wiped out approximately 424 billion U.S. dollars in market valuation, the second-largest single-day loss in market history. Despite beating quarterly revenue and profit estimates, investors were spooked by soaring capital expenditures, which hit a record 37.5 billion dollars, and slowing growth in its Azure cloud-computing division. Analysts noted that 45 percent of Microsoft's backlog now hinges on OpenAI's financial stability.
It also rippled through the software sector, with ServiceNow dropping 9.94 percent, Salesforce losing 6.09 percent, and Oracle declining 2.19 percent. Tesla also contributed to the market weight, falling 3.45 percent.
Conversely, some "Magnificent Seven" peers offered limited support. Meta Platforms surged 10.4 percent following a robust sales forecast. Although investors have previously expressed concern about Meta's AI spending spree, they took comfort in the company's latest results, which showed 24 percent year-over-year revenue growth, driven by online ads.
Meanwhile, Apple rose 0.72 percent ahead of its own highly anticipated fiscal first-quarter report scheduled for release after the closing bell. Economic sentiment was further clouded by a political standoff in Washington, D.C. The U.S. Senate failed to advance a 1.2-trillion-dollar funding package on Thursday after all 47 Democrats and several Republicans voted against it. The impasse centers on funding for the Department of Homeland Security following recent fatal shootings by federal agents in Minnesota.
In the bond market, the yield on the 10-year U.S. Treasury note eased to 4.23 percent, down from Wednesday's close of 4.25 percent, as investors weighed the Fed's recent rate-cut pause against the fiscal uncertainty in Washington.
U.S. stocks close mixed as Microsoft sinks
