Microsoft announced quarterly earnings after the US stock market’s close on Tuesday. And, as you can see in the chart, its stock initially rose before falling below where it ended the trading day. That suggests the shares may fall when the US stock market opens on Wednesday – and, given that it’s a major component of key stock market indexes, they’re likely to fall too.

Here’s why the tech giant’s stock rose, and then fell:

Microsoft’s key cloud computing business, Azure, saw a better-than-expected 38% increase in revenue (excluding the impact of currency swings), so investors took that as an encouraging sign and bought in, pushing the stock up 5%.

Then came the conference call, when Microsoft execs told analysts and investors that they expect Azure’s growth to slow this quarter, by 4 or 5 percentage points, implying revenue growth of just 33% or 34%. That’s a bigger slowdown than investors were banking on, and so it led to a reverse in earlier buying – and indeed, some additional selling.

But if you take a slightly longer-term view, there’s reason to be optimistic about Microsoft's cloud business. See, a major concern has been that the company pushed hard to close sales at the end of 2022, essentially pulling forward sales that otherwise would have occurred this year, and leaving a demand gap to be filled. The company assured investors that wasn’t the case and that the slowdown in growth it’s forecasting simply reflects the uncertain macroeconomic environment at present. And if that’s the case, it perhaps doesn’t feel like much of a slowdown at all…