Stock Market Today: Nasdaq Outperforms on Microsoft Earnings
The Nasdaq led in a mixed session for stocks Wednesday as Big Tech earnings impressed.


It was a mixed session for stocks Wednesday as investors mulled over the latest round of corporate earnings.
Tech stocks handily outperformed thanks to solid earnings reports from blue chip stocks Alphabet (GOOGL) and Microsoft (MSFT), though a hurdle in the latter's merger plans with Activision Blizzard (ATVI) sent shares of the video game maker tumbling.
Alphabet and Microsoft kicked off a busy stretch of earnings after last night's close when the two tech giants disclosed their quarterly results. Google's parent company Alphabet reported first-quarter earnings of $1.17 per share on $69.8 billion in revenue, with both figures topping analysts' estimates, thanks in part to solid ad revenue. GOOGL was up 2.4% at its session peak, but ended the day down 0.1%.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Microsoft, meanwhile, reported fiscal third-quarter earnings of $2.45 per share on $52.9 billion in revenue, beating analysts' estimates. The company also said revenue from its cloud service Azure came in higher than expected, and it projected stronger-than-anticipated current-quarter revenue. MSFT jumped 7.2% on "AI optimism" and a "consumer business that is much stronger than originally feared," says David Wagner, portfolio manager at Aptus Capital Advisors, an Alabama-based registered investment advisor.
Just hours after Microsoft reported earnings, though, U.K. regulators blocked the software company's pending acquisition of Activision Blizzard, citing concerns it will stifle cloud gaming competition. The nearly $69 billion deal was first announced in January 2022. While MSFT managed to brush off the news, ATVI stock tumbled 11.5%.
"Microsoft needs this deal to help stoke growth in the wake of disappointing personal computer sales, with the gaming market a far more high-growth area, which would supplement the group's leading AI position," says Sophie Lund-Yates, lead equity analyst at U.K.-based financial service firm Hargreaves Lansdown. As such, the company could use its more than $50 billion of net cash "languishing on the balance sheet" to appeal the decision, she adds.
As for the major indexes, the tech-heavy Nasdaq Composite climbed 0.5% to 11,854. The broader S&P 500, on the other hand, slipped 0.4% to 4,055, while the blue chip Dow Jones Industrial Average fell 0.7% to 33,301.
How investors can stay defensive
While the earnings calendar continues to be on investors' immediate radar, the next Fed meeting is right around the corner. Fed funds futures are currently pricing in a roughly 76% chance the Federal Reserve will raise interest rates by 25 basis points (0.25%) at its May gathering, followed by a pause in June and potential rate cuts this fall.
But while "investor optimism has been building as we likely approach the end of the current rate-hike cycle," says Chris Haverland, global equity strategist at Wells Fargo Investment Institute, it would be prudent for market participants to stay defensive – particularly with a potential recession looming later this year. This can be done by targeting the best dividend stocks, as well as the best consumer staples stocks and the best healthcare stocks, which are two traditionally defensive sectors.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
My Three-Day Rule for Investing: And If it Applies Now
Stock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Is It Time to Invest in Europe?
Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Stock Market Today: Investors Weigh Weekend Negotiations
Investors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.
-
Stock Market Today: Dow, S&P 500 Extend Win Streaks to 8
Strong earnings results for Magnificent 7 stocks Microsoft and Meta fueled upside in the equities market.
-
AI vs the Stock Market: How Did Value Stocks, Gold and PayPal Perform in April?
AI is a new tool for investors to use for data analysis, but can it beat the stock market? Here's how a chatbot's stock picks fared in April.
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
-
How Can Investors Profit From AI's Energy Use?
Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
Stock Market Today: Dow Rises 854 Points From Its Intraday Low
If there's one thing markets hate, it's uncertainty. But uncertainty is all they're getting these days.