Shares of Cleveland-Cliffs surged more than 20% Thursday after the steel producer posted a smaller-than-expected second-quarter loss and announced a new multiyear Defense Department contract, giving investors a double dose of good news following weeks of sharp declines in the stock.

Cleveland-Cliffs traded at $11.35, up $1.90, as of 12:42 p.m. Eastern time. The rally builds on a stretch of intraday buying that began at the market open, with shares climbing from roughly $10.67 to as high as $11.25 before settling near session highs.

Second-quarter results beat expectations

Cleveland-Cliffs reported second-quarter 2026 revenues of $5.2 billion, a $300 million increase from the previous quarter and roughly in line with Wall Street’s consensus estimate of $5.18 billion. The company posted a GAAP net loss of $134 million, or $0.25 per diluted share, with an adjusted net loss of $0.20 per diluted share, an improvement over the $0.21 per share loss analysts had been expecting on average heading into the report.

The quarter marked a significant improvement from the company’s first-quarter performance. Cleveland-Cliffs posted a GAAP net loss of $229 million, or $0.42 per diluted share, in the first quarter of 2026, meaning the company roughly halved its per-share loss quarter over quarter. Adjusted EBITDA came in at $286 million for the second quarter, a $191 million improvement compared with the $95 million recorded in the first quarter. Operating cash flow for the quarter was $230 million, and the company reported liquidity of $3.1 billion as of June 30.

A new defense contract adds to the momentum

Beyond the earnings beat, Cleveland-Cliffs also benefited Thursday from news of a new sole-source, five-year contract with the Defense Logistics Agency worth up to $400 million. Under the agreement, Cleveland-Cliffs will supply grain-oriented electrical steel to multiple branches of the U.S. military through 2030, adding a defense-sector revenue stream to a company whose business has historically centered heavily on automotive-grade steel products.

CEO points to a stronger second half ahead

Cleveland-Cliffs Chairman, President and Chief Executive Officer Lourenco Goncalves struck an optimistic tone about the company’s trajectory heading into the back half of the year. “Looking ahead, we have clear visibility into the continuous earnings improvement that began during the first half of the year,” Goncalves said. “With average selling prices, volumes, and costs all moving in the right direction, our second-half earnings performance should be our strongest since 2021 as Q4 EBITDA is currently expected to even further exceed our Q3 guidance. We expect to finish the year on a positive note and enter 2027 with significant momentum and additional opportunities for upside, including the higher reset of fixed price contracts and much improved profits in Canada.”

A stock that had fallen sharply heading into earnings

Thursday’s rally comes after a difficult stretch for Cleveland-Cliffs shares. The stock had declined roughly 24% over the 30 days leading up to the earnings report and was down nearly 32% year-to-date as of earlier this week, reflecting broader investor caution around the domestic steel industry tied to pricing power, capacity utilization and competition from imported steel. Shares had traded as low as $8.84 just three days before Thursday’s report, before climbing to close near $11.21 following the earnings release and defense contract announcement.

Options markets had anticipated significant volatility heading into the report. According to data compiled by Bloomberg, options pricing implied an 11% potential move in Cleveland-Cliffs shares on earnings day, a figure the stock has exceeded in five of its last eight quarterly reports. The company’s largest historical earnings-day swing came in October 2025, when shares jumped 22.8% against a implied move of just 6.9%.

Mixed underlying fundamentals

Despite Thursday’s rally, Cleveland-Cliffs’ broader financial picture remains complicated. The company generated approximately $18.61 billion in revenue over the trailing 12 months, but continues to operate with thin to negative margins, posting a profit margin of roughly negative 6% and negative free cash flow of around $477 million over that period. The company’s most recent quarterly net loss, prior to the improvement reflected in Thursday’s report, had been roughly $237 million.

Ahead of the earnings release, analyst sentiment on the stock had been notably split. Some market observers viewed Cleveland-Cliffs as a beaten-down steel producer trading below its intrinsic value, pointing to a fair value estimate of $10.86 per share compared with a pre-earnings trading price of around $9.28, a valuation gap bulls attributed to the company’s ongoing cost-reduction efforts, including strategic footprint optimization and internal coke and feedstock integration. Bears, meanwhile, pointed to the company’s recent losses and uncertainty heading into the earnings report as reasons for caution.

A company built around North American steel

Cleveland-Cliffs is a leading North America-based steel producer with a particular focus on value-added sheet products for the automotive industry, operating manufacturing facilities across the United States and Canada. The company’s business has historically been closely tied to automotive demand, making the newly announced defense contract a notable diversification move into a different end market with long-term, government-backed demand visibility through 2030.

With Cleveland-Cliffs management projecting its strongest second-half earnings performance since 2021, investors will be watching closely to see whether the improving trends in average selling prices, sales volumes and cost management highlighted by Goncalves continue to materialize over the coming quarters. The company’s next scheduled updates, including any further detail on its fixed-price contract resets and progress on profitability in its Canadian operations, are likely to serve as key checkpoints for determining whether Thursday’s sharp rally reflects the start of a sustained recovery or a shorter-term reaction to a single strong quarter following weeks of investor pessimism.

Sam Lamiroy said Burnham’s announcement is a step in the right direction and shows the government is trying to help, but agrees with Nick Smith that “VAT is the real problem”.

He said the turnover of a typical pub or restaurant can easily be between £500,000 and £1m, meaning a £1,000 saving “won’t make much difference”.

“The 20% drop in business rates is really just lip service, it won’t affect whether we survive or not, the real lever to pull is help with VAT, dropping the rate from 20% to 10% as it is in the rest of Europe,” he told the BBC.

Lamiroy also said he fears his Penzance-based bar and restaurant, 45 Queen Street, will not be considered a “pub” and so be ineligible under the terms of the support package.

And, urging the government to do more to support hospitality businesses, he said: “These are the first jobs for a lot of young people, it is a springboard into work.

“When these places shut, it’s not just my business and income that disappears, it is the entire team.”

Inflation has fallen both in the UK – down to 2.6% in the year to June helped by slowing diesel and petrol prices – and in the US to 3.5%.

But questions remain whether the slow down will prove short-lived due to the renewed conflict in the Middle East.

New data released on Thursday showed that UK petrol prices have risen by 5p a litre since the beginning of July, hitting reaching almost £1.56.

Diesel is at £1.72 a litre, on average, according to the RAC.

Average gasoline prices in the US have surpassed $4 a gallon once more, up from $3.92 a month ago, according to motorist advocacy group AAA.

“More expensive fuel and energy can ripple through the wider economy, increasing costs for businesses and ultimately feeding through into the price of food and other goods,” said Jonathan Raymond, investment manager at Quilter Cheviot.

“This creates another headache for central banks as they continue their battle against inflation.

“If energy prices remain elevated, policymakers may come under pressure to keep interest rates higher for longer or even raise them. This would come as a blow to mortgage holders and borrowers already feeling the strain.”

The Bank of England, which sets UK interest rates, has held them at 3.75% in its last four meetings.

Paul Dales, chief UK economist at Capital Economics, said he believed the Bank will “almost certainly” hold them again. But he said analysts still expected that interest rates could be cut next year if energy price rises ease.

Kevin Warsh, the newly-appointed chair of the US Federal Reserve, last week told Congress that the central bank had “no tolerance to persistently elevated inflation”.

US President Donald Trump had pushed Warsh’s predecessor, Jerome Powell, to cut interest rates.

Trump has made it clear he expects Warsh to fulfil his demand for reductions in borrowing costs for Americans.

But the Fed held US interest rates between 3.5% and 3.75% at Warsh’s first meeting last month. He also told Congress that he was committed to “restoring price stability” in the wake of the Middle East conflict impacting prices.

A widespread outage affecting Microsoft 365 disrupted access to Teams, SharePoint, Outlook, the Microsoft Store and several other services Thursday morning, with thousands of users across the country reporting problems logging in or completing basic tasks.

According to outage-tracking service Downdetector, complaints began surging just after 10:30 a.m. Eastern time. By 11:11 a.m., Downdetector had recorded 2,403 reports specifically tied to Microsoft 365, sharply above the service’s normal baseline of roughly 29 reports. That number climbed further as the morning progressed, with more than 6,000 users reporting problems with Microsoft 365 shortly after, and total reports eventually surpassing 8,000 across Microsoft’s broader suite of services.

Which services were affected

The outage spread across a wide range of Microsoft products. Downdetector showed elevated reports for Microsoft Teams, SharePoint, Excel, the Microsoft 365 Admin Center, Outlook, OneDrive, Copilot, Azure, Xbox Live and the Microsoft Store. Among the specific complaints tracked around 11:11 a.m., SharePoint accounted for 78% of reported issues, followed by Excel at 11% and the Admin Center at 6%.

Some users also reported difficulty downloading Windows updates or installing Microsoft Office applications, according to posts shared on Reddit. Separately, users of Microsoft Teams described being unable to save new meetings to their calendars, even though existing meetings could still be edited and impromptu meetings could still be started, a specific glitch that outage-tracking service StatusGator noted had actually been affecting some users for roughly 12 hours prior to Thursday’s broader disruption.

Microsoft’s response

Microsoft acknowledged the disruption Thursday morning. “We’re investigating reports of issues with Microsoft 365 services,” the company posted on social media platform X at 11:24 a.m. Eastern time. The company directed system administrators to a specific incident listing, MO1437424, within the Microsoft 365 admin center for additional information and ongoing updates. Microsoft’s own Service Health Status page reflected the acknowledgment, showing a status of “service degradation” for Microsoft 365 as of Thursday morning.

As of early afternoon, Microsoft had not provided a specific timeline for resolving the outage or disclosed a root cause, with several outlets covering the disruption noting that both the cause and expected duration of the interruption remained unknown.

A pattern of recurring disruptions

Thursday’s outage adds to a string of Microsoft 365 disruptions over the past year. A Microsoft 365 outage in January affected thousands of users for several hours before being resolved, and a separate outage specifically affecting Microsoft Outlook lasted for hours in April. Microsoft Teams also experienced a significant standalone outage in recent days, going down for several hours due to what the company described as a broken connection to an internal storage service introduced during a recent software deployment.

That earlier Teams-specific outage, which primarily affected users overnight when much of Europe and Asia were offline, illustrated how the timing of a disruption can significantly shape its real-world impact even when the underlying technical problem is serious. Thursday’s outage, by contrast, struck squarely during U.S. business hours, meaning far more users were actively relying on the affected services at the moment problems began.

Broader context around Microsoft

The outage comes at a notable moment for Microsoft more broadly. Earlier this month, the company filed a formal WARN notice disclosing 605 permanent layoffs at its Redmond, Washington headquarters, effective Sept. 4, part of a broader wave of workforce reductions the company has carried out this year. While there is no indication the layoffs are connected to Thursday’s technical issues, the timing has drawn additional attention to the company’s operations during a period of significant organizational change.

Downdetector also recorded elevated outage reports Thursday for several other major online services around the same general timeframe, including Amazon Web Services, Cloudflare, OpenAI, Fortnite and Dropbox, though those separate reports were limited to a few thousand complaints each and appeared unrelated to Microsoft’s specific outage.

Why these outages happen

Large-scale cloud service disruptions like Thursday’s typically stem from issues within a provider’s own backend infrastructure, ranging from faulty software deployments to configuration errors affecting how different services communicate with one another. Because so many Microsoft 365 products, including Teams, SharePoint, Outlook and OneDrive, share common underlying infrastructure, a single technical fault can often cascade across multiple, seemingly unrelated services simultaneously, which appears consistent with the broad range of products affected Thursday.

What affected users can do

For users experiencing ongoing issues, Microsoft’s guidance directs system administrators to check the Microsoft 365 admin center for the specific incident number associated with Thursday’s outage, where the company is expected to post updates as its investigation continues. Individual users without administrator access are generally advised to monitor Microsoft’s official status channels and outage-tracking platforms like Downdetector for updates, since there is typically little an individual user can do to resolve a server-side outage on their own.

What we don’t know yet

As of Thursday afternoon, Microsoft had not disclosed what caused the disruption, how many total users were affected globally, or when full service would be restored. Given the company’s history of resolving similar large-scale outages within a matter of hours, a resolution may come relatively quickly, though the exact timeline remains uncertain pending further updates from Microsoft.

What to watch for

Users looking for real-time updates on the status of their Microsoft 365 services are encouraged to check Microsoft’s official Service Health Status page directly or continue monitoring outage-tracking platforms for changes in reported issue volume. Based on the pattern of previous disruptions this year, a formal statement confirming full restoration of services is likely to follow once Microsoft’s engineering teams have identified and resolved the underlying technical issue behind Thursday’s outage.

While pubs, clubs and live music venues are set to benefit from the business rates relief, restaurants, cafés, hotels and cinemas have not been included in the government’s announcement.

For Claridge, that omission reflects a wider problem. He believes a reduction in VAT for hospitality businesses would have a far greater impact than changes to business rates.

He argues it would give businesses the breathing space they need to invest, employ staff and remain financially viable.

“It’s the only lever that will reliably make a difference to a material number of businesses.

“Whilst I understand that there is significant nervousness in government about such a bold radical move, [but] the time really is now for a bold, radical move.

“For me, it’s always been not can we afford it, but can we afford not to.”

The chef said the challenges facing hospitality cannot be solved by short-term measures alone and warned that without wider reform, more independent venues could disappear.

“Those of us who run and operate these businesses, it is not a get rich quick scheme,” he says.

“It is often a get poor quick scheme as it happens, but it’s getting to that point where you go, this doesn’t make sense.

“Make the maths math, as the kids might say.”

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8