Microsoft shares rose 0.96% on February 4, 2026, following a 2.87% decline on February 3. The stock continues to react to the January 28 earnings report. Microsoft reported revenue of $81.27 billion, surpassing the $80.3 billion estimate. Earnings per share reached $5.16, exceeding the $3.92 forecast. However, investors reacted negatively to slowing Azure growth and elevated capital expenditures. Capital spending hit $34.9 billion in the first quarter, surpassing the $30 billion guidance.
Broader market headwinds intensified the selloff. The Nasdaq Composite fell 0.30% on February 4 as investors rotated from high-growth tech into cyclical sectors. This rotation followed the nomination of Kevin Warsh as Federal Reserve Chair, signaling a more hawkish monetary policy. Economic uncertainty increased after private-sector data showed only 22,000 jobs added in January, significantly missing expectations.
Sector-specific developments added further pressure to Microsoft and other tech leaders. Anthropic released a new AI tool that sparked concerns regarding the potential displacement of existing software services.