4:15pm: Tech under pressure
US stocks finished Thursday’s session mixed, with investor pullback from Microsoft following its earnings driving the Nasdaq 0.7% lower to 23,685 points. The S&P 500 was down 0.1% at 6,969 points, while the Dow Jones added 0.1% at 49,071 points.
It was another strong day for precious metals, with gold up 1.7% at $5,430 and silver up 2.5% at $116.
2:40pm: Market movers
- Innodata Inc. shares jumped after the company was selected by Palantir to provide large-scale data annotation and AI workflow support for rodeo event analysis on Palantir’s AI platforms.
- Comcast Corp. topped expectations on adjusted earnings per share in the fourth quarter but narrowly missed revenue forecasts, delivering mixed results.
- Lockheed Martin shares rose as investors looked past a modest earnings miss to strong revenue growth, record F-35 deliveries, and an expanding defense backlog that underpins future growth.
- SAP shares plunged after the company reported weaker-than-expected cloud backlog growth and slightly missed earnings and revenue estimates, marking its worst daily drop in over five years.
- Thermo Fisher Scientific beat fourth-quarter earnings estimates, but its stock fell as investors focused on margin pressures and cautious 2026 guidance.
- Levi Strauss & Co. exceeded profit and revenue expectations on strong direct-to-consumer sales, though margin pressures from tariffs and weak wholesale demand weighed on sentiment.
- Southwest Airlines shares climbed after the carrier issued upbeat 2026 profit guidance that significantly outpaced Wall Street forecasts.
12:30pm: Meta's 'big step forward'
Bank of America said Meta Platforms delivered a “big step forward” in proving the returns from its heavy AI investments, pointing to a sharp acceleration in advertising growth and a stronger-than-expected outlook that drove a positive reaction to the results.
The broker highlighted Meta’s fourth-quarter revenue and earnings beat, alongside first-quarter revenue guidance that came in well above expectations and implies up to a seven-percentage-point acceleration in constant-currency growth. Bank of America said this underscored how multiple AI models are improving user engagement and ad efficiency, helping Meta outperform the broader digital advertising market.
While Meta’s expense and capital spending guidance exceeded consensus forecasts, the firm said investor concerns were eased by management’s commitment to profit growth in 2026 and its signal that spending can be moderated if revenue trends weaken. Bank of America argued that revenue upside should offset higher costs, reinforcing Meta’s sector leadership and strengthening its AI “moat.”
Following the results, the bank raised its 2027 earnings forecast by 12% and lifted its price objective to $885, reiterating a “Buy” rating and citing multiple product and AI-driven catalysts ahead.
11:35am: Microsoft weighs on Nasdaq
Microsoft’s earnings disappointment dragged technology stocks lower, knocking the company’s shares to their weakest level since May and erasing gains that had built up since the bout of market volatility seen around Liberation Day, according to IG's chief market analyst Chris Beauchamp.
Beachamp said the selloff undermined a tentative rebound in the Nasdaq 100 that had raised hopes of a rotation back into technology stocks, instead reinforcing investor caution toward the sector. He added that moves across asset classes highlighted shifting market momentum, with precious metals reversing sharply as investors rushed into the U.S. dollar on renewed geopolitical tensions linked to Iran, triggering a rapid unwinding of crowded trades.
10:40am: A closer look at Meta, MSFT
Jefferies raised Meta Platforms’ price target to $1,000, citing strong topline upside as AI reaccelerates growth and validates the ROI of its mega investment cycle. The firm noted Q1 revenue guidance of $53.5-$56.5 billion implies a 26-34% increase year-over-year, marking Meta’s strongest growth since Q3 2021. AI adoption—including video generation tools and Reels optimizations—was highlighted as a key driver of core ad momentum, while FY26 expenses and capex are expected to surge, reflecting continued investment.
For Microsoft, Jefferies emphasized a 110% year-over-year backlog surge to $625 billion, with OpenAI representing 45% of remaining performance obligations, though Azure growth remains supply-constrained. M365 Copilot adoption shows early traction, supporting long-term upside.
IBM’s software business impressed, with 14% revenue growth and a CY26 guide of 10%, driven by GenAI products and rebounding mainframe client spend. Jefferies highlighted reduced reliance on Red Hat and ongoing R&D and productivity initiatives as catalysts.
9.55am: Microsoft tanks to drag Nasdaq lower
US stocks have opened with some big tech falls dragging down benchmarks.
The S&P 500 is down 0.35% and the Nasdaq has dropped 1.05%, though the Dow Jones is up just over 100 points, or 0.1%.
On the Nasdaq 100 the fallers are led by Atlassian, down 12%.
More importantly, Microsoft has tumbled 10% - losing a massive £350 billion in just a few moments.
Tesla has dropped 1%, reversing its strong after-hours gains.
At the other end, Meta is up 8%, adding around $150 billion to its market cap.
Dragged into the negativity, Palantir is down 3% and Netflix 1.8%.
8.20am: Wall Street set for muted open after mixed tech earnings and Fed hold
US stocks look set for a quiet open on Thursday as investors digest a mixed bag of earnings from the big tech names and a steady hand from the Federal Reserve.
With just over an hour to the opening bell, S&P 500 futures were up just over 0.1%, while Dow and Nasdaq futures were both pointing to gains below 0.1%.
The previous day, the US stock markets had ended the session largely flat, with the Nasdaq nudging 0.2% higher to 23,857, while the Dow ticked up just 12 points to 49,016 and the S&P 500 finished down roughly half a point at 6,978, having briefly crossed the 7,000 mark for the first time at the start of the session.
Meanwhile, the small-cap Russell 2000 slipped 0.5% to 2,653.
As the Fed kept rates on hold, Chair Jerome Powell said there was “broad support” among policymakers for staying steady after three cuts last year. Only two members voted for an immediate move lower. Bonds and equities barely flinched.
"Yesterday was a rare occasion when both the latest Fed decision and a slew of Mag-7 results failed to materially move markets," said Jim Reid, macro strategist at Deutsche Bank.
Commodities markets continued to deliver the most eye-catching moves, with gold's 4.9% gain on Wednesday its best day since the early weeks of the Covid pandemic, before a move up another 2.4% in the Asian session to almost $5,600 per ounce, before retreating.
As for after-hours earnings, Microsoft shares down 6.9% in premarket trading as investors have been spooked at slowing cloud momentum and a sharp rise in spending, despite record revenues.
Meta Platforms shares are pointing to a 9% gain in premarket trading after record revenues eased worries over soaring AI investment, with CEO Mark Zuckerberg highlighting a "wave" of AI-driven growth.
Tesla shares are seen rising 1.7% after unveiling plans to shift focus from cars to AI and robotics, with investors backing the company's pivot to its humanoid Optimus project.
The dollar has remained relatively stable after Treasury Secretary Scott Bessent yesterday reiterated the “strong dollar policy”, a day after Trump had seemed more relaxed about its direction.
"It’s important to note that historically the dollar is not that weak," said Neil Wilson at Saxo, with the DXY index is "just marginally below its 10yr average dating back to the 70s having traded above it for the last dozen years."
Apple reports after the close tonight, with Nvidia not due until late February.