Microsoft (NASDAQ: MSFT) stock closed out May’s trading with a double-digit gain, up 10.4%. The S&P 500 gained 5.2% over the same period, and the Nasdaq Composite rose 8.4%.

Microsoft’s valuation moved higher in conjunction with bullish momentum for the broader market last month, but positive coverage from analysts also played a role in the stock’s gains. Despite a favorable backdrop for tech stocks in this year’s trading, the tech giant’s stock is still down roughly 14% in 2026.

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Microsoft saw a double-digit gain in a big month for tech stocks

May was a month of strong bullish trading for artificial intelligence (AI) stocks, and Microsoft’s share price moved higher in conjunction with the trend. While the company’s valuation has faced pressures this year as investors assessed the possibility that some of the company’s offerings could be at risk of AI-related disruption, last month’s trading saw investors move back into the stock.

Microsoft was coming off a strong quarterly report published at the end of April, which saw the business record non-GAAP (adjusted) earnings per share of $4.27 on revenue of $82.89 billion. The average analyst estimate had targeted adjusted earnings per share of $4.06 and sales of $81.39 billion. On the other hand, the midpoint of the company’s guidance for revenue between $86.7 billion and $87.8 billion fell short of the average analyst estimate’s call for $87.53 billion in the period. While Microsoft initially saw sell-offs following the report, the stock bounced back in May’s trading.

Why Microsoft stock has moved lower in June

Amid a bearish backdrop for the broader market, Microsoft has given up much of last month’s gains early in June’s trading. As of this writing, the stock is down roughly 7.5% this month. Meanwhile, the S&P 500 is down 2.6%, and the Nasdaq Composite is off 4.7%.

Coming on the heels of a powerful rally, AI stocks have gotten hit with a pullback recently — and macroeconomic concerns have played a big role in the sell-off. The Bureau of Labor Statistics published its jobs report for May last Friday, and the report actually showed that job growth in the period was far stronger than anticipated. While it may seem counterintuitive, investors are worried that the strong jobs report could be a negative for the stock market.

With economic activity looking relatively resilient, the Federal Reserve may prioritize combating inflation and choose to raise interest rates. Growth stocks tend to perform much better in a low-interest rate environment, and it’s possible that a rate hike could have a substantial bearish impact on Microsoft and other big tech names.

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Why Microsoft Stock Surged 10.4% Last Month But Is Sinking in June was originally published by The Motley Fool

A version of this article first appeared on TKer.co

Sentiment surveys confirm that consumers are very aware of rising prices, and they are complaining about them. People hate inflation.

Interestingly, inflation hasn’t really stopped people from spending. Economic data confirm this.

This contradiction helps explain why, despite poor vibes, the economy continues to grow, profit margins continue to expand, and corporate earnings continue to rise.

A recent research note from Goldman Sachs highlights studies reflecting these trends.

First, they cite two studies (this and this) that provide evidence companies have been increasing price markups on the stuff they sell. This evidence is in line with data showing gross profit margins have been expanding.

“After-tax corporate profits as a share of value added have roughly doubled from about 5% in the late 1980s to over 10% recently,” Goldman economists wrote. “Over the same period, U.S. firms have substantially raised markups — the amount by which prices exceed the marginal cost of producing goods and services.”

At least some of this trend toward rising markups over the years can be explained by falling costs. Regardless, the point is that what customers are paying increasingly covers much more than the costs.

But why hasn’t there been more pushback from consumers?

As I’ve been arguing for a while, customers will pay up if they can afford it.

On that, the Goldman economists found studies showing consumers’ sensitivity to price has been on the decline (study), a trend that can be explained by rising incomes (study).

“Higher income raises the opportunity cost of time, leading consumers to search less for lower prices,” Goldman economists wrote.

Of course, this also means wealthier folks are less price sensitive than poorer folks.

“[Economist Kunal Sangani] estimates that increases in average income and in income inequality — which has meant that less price-sensitive households account for a larger share of total consumption — can account for a roughly 8pp rise in the aggregate retail markup from 1980 to 2018,” Goldman economists added.

This speaks to the K-shaped economic narrative, which argues that higher-income cohorts have increasingly driven spending while those on the lower end retrench.

For those familiar with the concept of price elasticity of demand, this discussion isn’t exactly mind-blowing. Nevertheless, it’s a timely one as everyone wrestles with why corporate profit margins remain high despite consumers’ distaste for higher prices.

Take off your sentiment hat and put on your stock market hat

As a consumer, I don’t like any of this. I’d much rather be a beneficiary of any corporate cost savings. But instead, the opposite appears to be happening.

Admittedly, I’m not helping the problem. Like the people in Sangani’s study, I frequently find myself begrudgingly paying up for stuff when I could be trading down to lower-priced alternatives.

As an investor in the stock market, I suppose I’m willing to tolerate all this as long as it’s driving sustainable earnings growth, which is bullish for the stocks in my portfolio.

This dynamic speaks to the internal conflicts we face living in a world where how you feel and how you’re treated might not align with the overall direction of the economy or the markets.

There are times when you are wearing your sentiment hat. And there might be times you’re motivated to put on your policy hat.

But TKer is a stock market newsletter, which means we’re putting on our stock market hat right now. And the evidence continues to show that publicly traded companies, which are not charities, remain effective at maneuvering in ways that grow earnings and improve shareholder value.

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Related from TKer:

Laurie Metcalf arrived for the first day of filming Netflix’s “Big Mistakes” with something she needed to get off her chest. She doesn’t recall where she said it, but it was probably in the hair and makeup trailer sitting next to series co-creator and her co-star Dan Levy.

“We had just barely met at that point, but I told him, ‘I have extremely big shoes to fill, and I know that in my heart because I’m playing your second TV mom,’” Metcalf tells Variety.

She, of course, was referring to Levy’s previous TV mom, played by the late comedy legend Catherine O’Hara in “Schitt’s Creek.” In O’Hara’s hands, the character of Moira Rose was a larger-than-life presence in her son’s life, learning to love him more than she loved the spotlight — or at least just as much. In “Big Mistakes,” Metcalf is tasked with playing a similarly oversized onscreen role, and she wanted Levy to know she understood the weight of that responsibility.

“We never talked about comparisons or anything like that, and I think he wanted dynamics to be different,” Metcalf says. “But I wanted to be there for his character, just as much as Moira Rose was for him in ‘Schitt’s Creek.’”

As frenetic mayoral candidate Linda Morelli, Metcalf is both a blessing and a curse to her son Nicky (Levy) and daughter Morgan (Taylor Ortega). The siblings definitely don’t need the level of stress she brings, as they unintentionally descend further into a world of organized crime. Linda is brash, carries her moral superiority as a badge of honor and fiercely protects her children, whether they like it or not. She’s a force in the Morelli family, but she’s hardly the only difficult mother in Metcalf’s recent filmography.

Also on Netflix this year, the Emmy-winner tackled the role of Augusta Gein, the mother of infamous serial killer Ed Gein (Charlie Hunnam) in “Monster: The Ed Gein Story.” Augusta is a deeply religious woman who haunts her son’s psyche even before she dies — and he “resurrects” her with the exhumed body of another woman. It is perhaps the darkest role Metcalf has ever played, at least since 1997’s “Scream 2,” when she was cast as the mother of another serial killer, Billy Loomis (Skeet Ulrich), and ended up breaking bad herself.

But in “Monster,” Metcalf wasn’t interested in playing an evil mom who was cruel to her child just for the sake of it. She needed depth, something more to grab onto.

“The challenge for me was that the darkness came from their dysfunctional relationship, and knowing that her influence on him is part of the reason why his life went in a certain direction,” she says of playing Gein’s mother. “That’s a huge responsibility to accept, to know that your character is responsible for steering him into the darkness. That, and, of course, his mental disorder. The challenges can’t just be black and white. She can’t just be pure evil and he’s pure good, and she just beats him down and beats him down. So Charlie and I tried to find, in each scene, a little bit of heart in there, a little connection, and a little bit of how he did look up to his mother, no matter how she treated him.”

In choosing any role, the Tony-winning actress — who was nominated again this year for “Death of a Salesman”— is always looking for the exhilaration of being on a stage. She said both “Big Mistakes” and “Monster” gave her that opportunity.

In the case of “Monster,” Metcalf’s scenes with Hunnam are essentially a two-hander play. Their interactions are bound to the home, where he is haunted by the ghost of her influence, criticism and ill will, before and after her death. Director Max Winkler worked closely with the two actors to create a rapport that could inform their face-offs, which operate on rage and fear.

“Any scene in film or TV that has any kind of length to it, I really appreciate because that’s where you can find some traction,” Metcalf says. “That’s where you can, as an actor, get some momentum going and really lock in with your scene partners and start to find a pace. It was really just me, Charlie and Max on set. We explored a lot. Nothing was set in stone on the page, and anybody’s idea was welcome. The best idea wins, and that’s a really comforting way to work.”

Becoming Augusta Gein was a leap of faith for Metcalf, who says there were no scripts available when the role came up. “I didn’t know what to expect walking in the door,” she says.

“Big Mistakes” was a different kind of leap. Levy and co-creator Rachel Sennott’s fast-paced pilot script came with lengthy scenes and a lot of moving parts, Metcalf says.

“I think the more we rehearsed them, the more all the actors got into the groove and found our own rhythms,” she says. “We found where we could overlap, and cut each other off and cross the camera in front of each other. It was very organic, very present like theater is. I am intimidated by cameras being in the room, but less so in working that way.”

Metcalf says she immediately figured out how Linda was supposed to come barging into the lives of her children. “Dan wrote my first line of the whole series in all caps,” she says, laughing. “I knew what to do with that. It immediately got loud, and we just built from there.”

Trusting the process paid off. Metcalf’s entire “Big Mistakes” family came to see her in Broadway’s “Death of a Salesman” on opening night.

Navigating the darkness and the light of both roles brought back memories of her ”Scream 2” experience. As Debbie Salt, a fake journalist-turned-vengeful killer, Metcalf got to play in the meta sandbox of Kevin Williamson’s humor-laced horror. Nearly 30 years later, she looks back on that production as even more challenging than the dreary depths of “Monster.”

“I was very new to film back then, so the ‘Scream’ experience, for me, was a huge learning curve,” she says. “It was intense, and there were days where there wasn’t really what I would call a lightness around the set because we’re doing such heavy stuff.”

After three decades, Metcalf briefly reprised her role this year in “Scream 7.” And just like mamas Gein and Morelli, her “Scream” matriarch still has something to say.

“I find super opinionated people really funny and fun to play, because they are giving 110 percent no matter what,” she says. “Right, wrong, can’t read the room, whatever’s happening. They are giving their all.”

Just like Laurie Metcalf.