S&P 500: Tech Stocks Struggle as Microsoft Drops, Meta and Tesla Shine

Wall Street Mixed as Meta and Tesla Gains Offset Microsoft Weakness

Wall Street’s major indexes traded mixed late Thursday morning, as strong earnings from Meta and Tesla helped counter a sharp drop in Microsoft shares following a disappointing cloud revenue forecast. The Dow reversed early losses to trade higher, while the Nasdaq remained under pressure. The S&P 500 rose 0.2%, the Nasdaq Composite edged lower by 0.1%, and the Dow Jones Industrial Average gained 152 points, or 0.3%.

Investors remained cautious after fresh economic data showed fourth-quarter GDP growth slowing to 2.3%, missing expectations. Sentiment was also dampened by the Federal Reserve’s latest decision to keep interest rates unchanged, with Fed Chair Jerome Powell signaling that rate cuts are unlikely in the near term.

How Are Megacap Tech Stocks Moving?

Shares of Meta Platforms surged 4.5% after the company delivered better-than-expected fourth-quarter revenue. However, it warned that first-quarter sales could fall short of estimates. Tesla rose 0.5% despite missing earnings and revenue expectations, as investors focused on its plan to roll out cheaper EV models in early 2025 and test a paid autonomous car service in June.

Microsoft shares tumbled more than 6% after the company projected weaker growth in its cloud segment, raising concerns about slowing enterprise demand. Other tech heavyweights, including Apple and Intel, are set to report after the closing bell.

Which Sectors Are Leading the Market?

Ten of the 11 S&P 500 sectors traded higher, led by a 2.1% jump in communication services, fueled by Meta’s strong performance. Technology stocks lagged, down 0.5%, weighed by Microsoft’s post-earnings decline. Meanwhile, semiconductor stocks saw strong gains, with Broadcom rising 5.8% and Marvell Technology up 3.8%. The Philadelphia Semiconductor Index advanced 1.4%.

The Russell 2000 index, a key gauge for small-cap stocks, outperformed with a 1.3% gain.

What Are the Biggest Stock Movers?

Health insurer Cigna dropped 9.7% after issuing a weaker-than-expected annual profit forecast and missing fourth-quarter estimates. United Parcel Service plunged 14.8% after providing disappointing 2025 revenue guidance.

On the upside, IBM surged 12.9% after reporting better-than-expected fourth-quarter profits. Lam Research gained 5.2% after delivering an upbeat revenue forecast, benefiting from increased demand for chip-making equipment amid the AI boom.

What’s Next for the Market?

With earnings season in full swing, traders are closely watching upcoming reports from Apple and Amazon, as well as key economic data releases. While the Fed’s cautious stance has tempered rate-cut expectations, inflation and job market trends will be critical in shaping market sentiment.

For now, the mixed market reaction suggests investors are balancing strong corporate earnings with macroeconomic uncertainties, keeping equities in a choppy trading range.

More Information in our Economic Calendar.