Dow Jones drops 131 points despite blockbuster results from Microsoft and Meta; broader market struggles amid Fed uncertainty and tariff tensions
U.S. stocks seesawed Thursday as the S&P 500 and Nasdaq Composite briefly touched intraday records before retreating, weighed down by weakness in broader sectors despite stellar earnings from Microsoft and Meta Platforms.
The S&P 500 edged up 0.1%, while the Nasdaq Composite rose 0.3%. The Dow Jones Industrial Average lagged, falling 131 points, or 0.3%, dragged down by steep losses in UnitedHealth and Merck.
Microsoft and Meta, part of the “Magnificent Seven” group of megacap tech stocks, surged 4% and 12%, respectively, after posting better-than-expected quarterly results. Microsoft reported that annual revenue from its Azure cloud division surpassed $75 billion, pushing its market capitalization to $4 trillion. Meta issued an upbeat third-quarter sales forecast, beating Wall Street estimates.
Yet the broader market failed to rally, with six of the 11 S&P 500 sectors closing in the red. UnitedHealth dropped 5%, and Merck fell 4%, leading declines in the Dow.
“These market reactions—despite strong earnings, capex, and buyback activity—are becoming increasingly difficult to justify,” said Joseph Cusick, senior vice president and portfolio manager at Calamos Investments. “At the same time, downside moves have been relatively contained.”
Investor sentiment was further dampened by uncertainty over Federal Reserve policy following this week’s central bank meeting. Traders are now questioning whether interest rates will be cut in September or later in the year.
Geopolitical tensions also weighed on markets. The White House faces a Friday deadline to impose sharply higher tariffs on key trading partners, including India and Brazil. President Donald Trump announced a 25% tariff on Mexican imports will be extended for another 90 days.
Meanwhile, U.S. Treasury Secretary Scott Bessent said negotiations with China “have the makings of a deal,” though he offered no timeline or details. The current truce on tariffs between the two nations expires Aug. 12.
Despite Thursday’s volatility, July has been a strong month for equities. The S&P 500 is up more than 2%, the Nasdaq has gained about 4%, and the Dow has climbed 0.6%.
Apple and Amazon, also part of the Mag-7 cohort, are scheduled to report earnings after the bell Thursday.
Major Index Performance – Thursday
| Index | Change | % Change | Notes |
|---|---|---|---|
| S&P 500 | +5 pts | +0.1% | Hit intraday record before pulling back |
| Nasdaq Composite | +45 pts | +0.3% | Boosted by Microsoft and Meta |
| Dow Jones Industrial Avg. | -131 pts | -0.3% | Dragged by UnitedHealth and Merck |