Classic Outlook bugs: group creation errors, Gmail/Yahoo sync failures, missing cursor

In March 2026 Microsoft listed several classic Outlook for Windows problems under investigation: group creation fails with a server error, Gmail and Yahoo accounts stop syncing after a password change, and the mouse pointer disappears. None of them is a security issue, but they show which parts of classic Outlook's plumbing are fragile, and the workarounds help anyone supporting a Microsoft 365 tenant.

What happened

Microsoft published or updated known-issue articles for classic Outlook (the Win32 desktop client, as opposed to the new Outlook for Windows and Outlook on the web):

• Group creation fails. Creating a Microsoft 365 group from classic Outlook shows "Can't connect to the server" under the Name field. Microsoft traced it to a failing ValidateUnifiedGroupProperties call with the internal error "Both AAD and MSGraph clients are null or AAD Graph is disabled for this API." It can happen even when the tenant has Exchange Web Services (EWS) enabled.
• Gmail and Yahoo sync errors. After a user changes their Gmail or Yahoo password, classic Outlook may not prompt them to sign in again. Sync then fails with errors such as 0x800CCC0E (synchronising subscribed folders, checking for new mail) and 0x800CCC0F or 0x80070057 (sending). Microsoft said other triggers may exist and that it was still investigating.
• Disappearing mouse pointer. The cursor vanishes while moving over classic Outlook, and messages in the list change colour on hover. It has also been reported, less often, in OneNote and other Microsoft 365 apps.

Who is affected

• Users of classic Outlook for Windows (Microsoft 365 Apps, version 16.0).
• Tenants where users create groups from the desktop client.
• Users with Gmail or Yahoo accounts added to classic Outlook, especially after password changes.
• Help desks supporting all of the above.

What it means for developers and engineering teams

The group-creation error is a symptom of Microsoft moving away from Azure AD Graph and, over time, EWS in favour of Microsoft Graph. The error text shows a code path that still expected an AAD Graph client and found none. Microsoft has said it is retiring both older APIs. Any internal tool, script or add-in that still calls graph.windows.net or EWS will hit similar failures, possibly with similarly unclear errors. If you maintain Microsoft 365 integrations, this is a reminder to finish moving them to Microsoft Graph.

The Gmail/Yahoo issue is about stored credentials. Classic Outlook keeps identity data per account under the user's registry hive. When a provider-side change, such as a password reset or a token being revoked, isn't picked up, Outlook keeps retrying with stale credentials instead of asking the user to sign in. The same failure mode exists in any desktop or mobile client that caches OAuth refresh tokens: if your app doesn't treat invalid_grant or a 401 as "re-authenticate the user", people get stuck in a sync error loop.

The registry workaround works because deleting the identity subkey removes Outlook's cached account state, which forces a fresh sign-in. The same idea applies in your own apps: give support teams and users a documented "reset this account" path that clears cached tokens and profile state, so they don't have to edit low-level storage by hand. For managed fleets, a script that removes the subkey for a specific address can be pushed through Intune or another endpoint tool when many users hit the same error.

What to do now

1. Group creation: create and edit groups in Outlook on the web or the new Outlook for Windows until Microsoft ships a fix.
2. Gmail/Yahoo sync: close Outlook, open Registry Editor and go to HKEY_CURRENT_USER\Software\Microsoft\Office\16.0\Common\Identity\Identities. Find the subkey for the affected email address, export it as a backup, delete it, then restart Outlook and sign in again when prompted.
3. Missing cursor: hover over the message list until an item changes colour and click it. Or open PowerPoint, click into an editable area and switch back. Or restart the PC. Microsoft asks affected admins to open a support case with diagnostic logs.
4. Audit your integrations for Azure AD Graph and EWS calls and plan their move to Microsoft Graph.
5. In your own apps, make sure a failed token refresh starts an interactive sign-in instead of an endless retry.

Related on TechLogHub

• What is OAuth?
• What is a REST API?

Sources

• Microsoft Support: "Can't connect to the server" when creating groups in classic Outlook
• Microsoft Support: Errors 0x800CCC0E and 0x800CCC0F synchronizing Gmail and Yahoo accounts in classic Outlook
• Microsoft Support: Mouse pointer disappears when hovering over classic Outlook
• Born's Tech and Windows World: Outlook Classic sync and connect issues under investigation