US stocks were mixed on Thursday as investors balanced a fresh wave of earnings from major technology companies against the Federal Reserve’s latest interest rate decision and lingering political and geopolitical uncertainty.
The S&P 500 edged up 0.1%, reflecting a cautious tone after the benchmark briefly crossed the 7,000 level in the prior session.
The Dow Jones Industrial Average added just 16 points, while the Nasdaq Composite slipped 0.1%, weighed down by a sharp decline in Microsoft shares.
Tech earnings drive sharp divergences
Earnings from large technology companies dominated market attention and drove wide dispersion across individual stocks.
Meta Platforms was among the session’s standout performers, surging about 9% after the Facebook parent issued a stronger-than-expected first-quarter sales forecast.
The upbeat outlook reassured investors about advertising demand and helped offset broader concerns about slowing growth in parts of the technology sector.
Tesla shares also advanced, rising 1.6% after the electric-vehicle maker reported fourth-quarter results that exceeded expectations.
The gains in Meta and Tesla underscored how selective optimism around earnings continues to support parts of the market, even as investors scrutinise guidance closely.
That optimism was tempered by a steep sell-off in Microsoft. Shares of the software giant plunged roughly 10%, marking what would be its worst one-day decline since March 2020.
Microsoft reported that cloud growth slowed in its fiscal second quarter and issued softer-than-expected guidance on operating margin for the fiscal third quarter.
The results raised questions about the pace of expansion in one of the most important engines of growth for Big Tech and weighed heavily on the Nasdaq.
Investors are now looking ahead to results from Apple, which is scheduled to report earnings after the market close on Thursday.
Apple’s report is expected to be a key test of consumer demand and margins, particularly as markets assess the broader health of the technology sector.
Outside of technology, Caterpillar shares rose more than 1% after the industrial manufacturer posted fourth-quarter results that comfortably beat Wall Street expectations, offering a more cyclical counterpoint to the mixed signals coming from Big Tech.
Fed decision reinforces cautious stance
Thursday’s muted market moves followed the Federal Reserve’s policy decision on Wednesday, when the central bank kept its benchmark interest rate unchanged at a target range of 3.5% to 3.75%. The decision was widely anticipated, and markets reacted only modestly.
In its post-meeting statement, the Federal Open Market Committee said indicators suggest that “economic activity has been expanding at a solid pace” and that the unemployment rate “has shown some signs of stabilization.”
At the same time, the Fed reiterated that inflation remains above its 2% target.
Federal Reserve Chair Jerome Powell reinforced that message, saying inflation is still well above the central bank’s goal and underscoring expectations that policymakers will proceed cautiously.
Two Fed governors, Stephen Miran and Christopher Waller, dissented from the decision in favor of a 25 basis-point rate cut.
Despite those dissents, the overall signal from the meeting was one of patience.
Futures markets continue to price in two quarter-point cuts by the end of 2026, according to the CME FedWatch Tool, but expectations for near-term easing remain low.
Traders now largely expect the Fed to hold rates steady through the end of the current quarter and potentially until Powell’s term as chair concludes in May.
Political and geopolitical risks linger
Beyond monetary policy, concerns over the Federal Reserve’s independence have added another layer of uncertainty to the market backdrop.
A Department of Justice criminal investigation involving Powell, along with an evolving effort to remove Fed Governor Lisa Cook, has drawn attention to potential political interference in monetary policymaking.
Those developments have contributed to a more cautious risk appetite among investors.
Geopolitical risks have also weighed on sentiment.
Reuters reported that US President Donald Trump is considering options against Iran, including targeted strikes on security forces and leadership figures, as protests continue in the country.
The report added to broader unease about global stability, even as markets attempted to focus on earnings and economic fundamentals.
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