Wall Street ends down as AI worries slam tech stocks
By Noel Randewich and Pranav
Kashyap
Wed February 4, 2026 6:21 AM
It was a second day of panic selling with mounting fears that the AI rally has not only peaked but is hurting software developers. And, like yesterday, the pattern was for a straight downward spiral on both the S&P and Nasdaq which was much worse during the day than at close. Like yesterday, they both had huge losses until about 1 pm, the Nasdaq down nearly 600, the S&P down about 80. The Dow had a much better time starting way up over 400 only to crash to zero by 1 pm. And like yesterday, after the crashes, they all recovered a large portion of their losses, tech still closing quite solidly in the red but the Dow having a nice 3-digit gain.
Like yesterday, no explanation was given for why the crash happened in the first place aside from the AI panic selling and certainly no explanation for the comeback after 1 pm. But for a second day, investors have been suddenly skeptical of AI actually paying off while selling companies that continue to make heavy investments in that arena. The chip index fell a whopping 4.4% on the day for a second day. Software companies continued to get socked as the migration continues into small caps and defensive sectors. The S&P value index gained for a fifth straight session while the growth index dropped. The private payrolls report Wednesday showed a smaller than expected increase with job losses in business services and manufacturing. Volume was again very heavy at 24.6 billion, way ahead of the 19.9 average.
DJ: 49,240.99 -166.67 NAS: 23,255.19
-336.92 S&P: 6,917.81
-58.63 2/3
DJ: 49,501.30 +260.31 NAS: 22,904.58
-350.61 S&P: 6,882.72
-35.09 2/4
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