Why Microsoft Stock Is Sinking Today

Key Points

• Microsoft stock is pulling back today in response to weak August jobs data.

• Soft jobs numbers in August suggest that the Federal Reserve will cut interest rates this month, but the U.S. economy is looking weaker than expected.

• New tariffs on semiconductors could also negatively impact Microsoft.

• 10 stocks we like better than Microsoft ›

Microsoft (NASDAQ: MSFT) stock is moving lower in Friday's trading in response to a handful of bearish catalysts. The tech giant's share price was down 2.8% as of 3 p.m. ET. At the same point in the day's trading, the S&P 500 and the Nasdaq Composite were down 0.5% and 0.2%, respectively.

Stocks are broadly moving lower today as investors react to the latest U.S. jobs report from the Bureau of Labor Statistics (BLS). Microsoft's valuation is also slumping today in response to news that the Trump administration will be implementing tariffs on semiconductors that are manufactured in other countries.

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Microsoft stock sinks on August jobs data

The BLS published its August jobs report this morning, and the results were significantly weaker than economists had anticipated. While the average forecast had called for the addition of 75,000 non-farm jobs in the month, only 22,000 jobs were actually added in the period according to the forecast.

The BLS revised jobs growth for July from 73,000 to 79,000, but it also revised its estimate for June and swung from its previous estimate of 14,000 jobs added in the period to 13,000 jobs lost in the month. While weakened hiring data supports the thesis that the Federal Reserve will cut interest rates this month, mounting signs of weakness for the U.S. economy are prompting sell-offs for Microsoft and other stocks today.

Tariff news is also pushing Microsoft stock lower

The Trump administration announced today that it will be rolling out new tariffs for chips that are manufactured outside of the country. Previous statements had suggested that chips produced by Taiwan Semiconductor Manufacturing would be exempt from new import taxes, but it looks like there has been a reversal on the matter.

Microsoft uses chips from Nvidia and other chip leaders for its data center and artificial intelligence (AI) infrastructure. While many of the key chip designs originate from inside the U.S., most of the key chip manufacturing happens in TSMC's Taiwan-based manufacturing facilities. That suggests that Microsoft and other AI infrastructure leaders could soon face higher costs due to new tariffs.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.