Microsoft and Meta’s profits are rising but their stocks are falling because both companies are not building data centers fast enough.

The S&P 500 was down 1.6% in midday trading and is on track for its worst day in nearly eight weeks, falling further than its record set earlier this month. The Dow Jones Industrial Average was down 418 points, or 1%, as of 11:15 a.m. Eastern time. The Nasdaq Composite was down 2.4% and headed for its second straight loss after setting its latest all-time high.

Microsoft reported a bigger profit growth for the latest quarter than analysts expected. Its revenue also advanced, but its stock fell 6% as investors and analysts scrutinized potential downsides. Many focused on Microsoft’s forecast for future growth in its Azure cloud-computing business, which fell short of some analysts’ expectations.

Facebook’s parent company, too, reported better-than-expected earnings. As with Microsoft, however, that wasn’t enough to push the stock higher. Investors focused on Meta Platforms’ warning that it expects a “big rush” to finish next year as it continues to pour money into developing artificial intelligence. It is down 3.6%.

Both Microsoft and the Meta Platform have risen in recent years amid the frenzy surrounding AI, and are entrenched among Wall Street’s most influential brands. But such stellar performances have critics saying their stock prices have risen too quickly, leaving them too expensive. It’s hard to meet everyone’s expectations when they’re so high, and both Microsoft and Meta were among Thursday’s heavyweights in the S&P 500.

The next two companies in the influential group of products known as the “Magnificent Seven” to give their latest results will be Apple and Amazon. They are set to report after trading ends for the day, and both were down at least 1.3% on Thursday.

Earlier this month, Tesla and Alphabet launched Magnificent Seven reports with results that investors found impressive enough to reward higher stock prices. The only remaining member, Nvidia, will report its results later this year in earnings, and its decline of 4.3% was the heaviest Thursday in the market after Microsoft.

Big Tech’s slump on the last day of October helped erase the S&P 500’s gains this month. The index fell 0.7% and is on track for its first monthly decline in the past six, although it set its highest level in the middle.

However, it was not a bathroom on Wall Street due in part to yachts and cigarettes.

Norwegian Cruise Line Holding rose 8.2% after posting stronger profits for the latest quarter than analysts expected. The cruise line says it is seeing strong demand from customers across its brands and cruises, and has raised its full-year profit forecast to 2024.

Altria Group rose 7.6% for the S&P 500’s other biggest gain after it also beat analysts’ profit expectations. CEO Billy Gifford is credited with perseverance for its Marlboro brand, among others, and announced a cost-cutting program.

Oil and gas companies also generally rose after the US crude oil price gained 1.3% to recoup some of its losses for the week to date. ConocoPhillips jumped 4.9%, and Exxon Mobil gained 1%.

In the bond market, Treasury yields continued to rise after mixed reports on the US economy.

Another report said the Federal Reserve’s target inflation rate fell to 2.1% in September from 2.3%. It is almost a return to the Fed’s 2% target, although the trends after ignoring the cost of food and energy were sharper than economists expected.

A separate report said growth in workers’ wages and benefits slowed over the summer. That would put downward pressure on future inflation. However, a third report said that fewer US workers filed for unemployment benefits last week. That is an indication that the number of people deported is still low across the country.

Treasury yields went up and down several times on reports before climbing. The 10-year Treasury yield rose to 4.31% from 4.30% on Wednesday. That’s up significantly from a level of about 3.60% it was at in the middle of last month.

Yields are rising after a series of stronger-than-expected reports on the US economy. Such data support hopes that the economy can avoid a recession, especially as the Fed cuts interest rates to support the labor market rather than keeping them high to reduce inflation. high finance. But the surprising tightening is also forcing traders to lower their expectations of how much the Fed will cut rates.

In stock markets in other countries, indices fell in most of Europe and Asia.

South Korea’s Kospi fell 1.5% for one of the biggest losses after North Korea tested a new intercontinental ballistic missile designed to be able to hit the US mainland in a move that was likely intended to capture America’s attention before Election Day.

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