Wall Street ended sharply lower on Tuesday as investors worried about AI creating more competition for software makers, keeping them on edge ahead of quarterly reports from Alphabet and Amazon later this week.
AI heavyweights Nvidia NVDA.O and Microsoft MSFT.O both fell. Alphabet GOOGL dropped ahead of its report on Wednesday, while Amazon AMZN.O declined ahead of its Thursday report.
Investors in recent months have become pickier about AI-related stocks, looking for companies generating measurable returns from their outsized investments in the new technology.
Wall Street’s attention on Tuesday turned to technology companies that could face steeper competition and lower margins as a result of AI. One catalyst driving those concerns was Anthropic’s launch of a legal tool for its Claude AI chatbot.
“We're looking at a lot of software names that are seen as companies that may well be disrupted when we start to see the advancement of artificial intelligence. We're seeing a lot of software companies across the spectrum get hit,” said Art Hogan, chief market strategist at B. Riley Wealth.
Salesforce CRM.O, Adobe ADBE.O, Synopsys SNPS.O, Datadog DDOG.O, Atlassian TEAM.O and Intuit INTU.O fell sharply.
AI data firm Palantir PLTR.O bucked the trend, rallying after strong quarterly results late on Monday.
The S&P 500 software and services index .SPLRCIS fell for a fifth consecutive day.
"We've got an expensive market and expectations are really high. Many areas, especially around AI, are priced for perfection. That's just got us in a skittish environment," said John Campbell, senior portfolio manager, Allspring Global Investments.
Healthcare stocks came under pressure after Wegovy maker Novo Nordisk warned that it expected a steep decline in annual sales. The company's U.S.-listed shares NVO.Nplummeted.
Rival Eli Lilly LLY.N fell, as did obesity drugmakers Viking Therapeutics VKTX.O and Structure Therapeutics GPCR.O.
WalmartWMT.O climbed to become the first brick-and-mortar retailer ever to hit $1 trillion in stock market value.
Advanced Micro Devices AMD.Ofell ahead of its quarterly report after the bell.
Walt Disney DIS.Ndipped after it named theme parks head Josh D'Amaro as CEO, placing a longtime insider at the helm and ending succession uncertainty.
PayPalPYPL.Oslumped after it forecast 2026 profit below estimates.
According to preliminary data, the S&P 500 .SPX lost 59.04 points, or 0.85%, to end at 6,917.40 points, while the Nasdaq Composite .IXIC lost 336.20 points, or 1.42%, to 23,255.91. The Dow Jones Industrial Average .DJI fell 170.98 points, or 0.35%, to 49,236.68.
EARNINGS DELUGE
With one quarter of the S&P 500 set to report quarterly results this week, analysts expect companies to have grown their earnings nearly 11% in the December quarter, up from an estimate of about 9% at the start of January, according to LSEG data.
Pfizer PFE.Nfell despite posting fourth-quarter profit above estimates, while MerckMRK.N rose after quarterly results.
PepsiCoPEP.O shares gained after the company announced price cuts on core brands such as Lay's and Doritos.
Meanwhile, legislation to end a U.S. government shutdown narrowly cleared a procedural hurdle in the House of Representatives, setting up a vote on final passage later in the day.
The partial shutdown has postponed releases of key jobs data on Friday along with the JOLTS report, originally expected on Tuesday.
Wall Street ended sharply lower on Tuesday as investors worried about AI creating more competition for software makers, keeping them on edge ahead of ...
Small Cirrus SR 20 crashed in Littleborough, Rochdale, after taking off from Birmingham Airport...
President Donald Trump on Tuesday (February 3) said the U.S. is negotiating with Iran "right now," after Tehran demanded that planned talks be held in...
A second group of Palestinian medical evacuees arrived in Egypt from Gaza via the Rafah border crossing on Tuesday (February 3), the second day since ...
Ukrainian President Volodymyr Zelenskyy said on Tuesday that Kyiv is waiting for a response from the United States after overnight Russian attacks dam...
Small Cirrus SR 20 crashed in Littleborough, Rochdale, after taking off from Birmingham Airport
President Donald Trump on Tuesday (February 3) said the U.S. is negotiating with Iran "right now," after Tehran demanded that planned talks be held in Oman not Türkiye, and that the scope be narrowed.
A second group of Palestinian medical evacuees arrived in Egypt from Gaza via the Rafah border crossing on Tuesday (February 3), the second day since the crossing reopened.
Ukrainian President Volodymyr Zelenskyy said on Tuesday that Kyiv is waiting for a response from the United States after overnight Russian attacks damaged energy infrastructure across the country, raising fresh questions over Moscow’s commitment to a proposed halt on strikes.
Heavy snow continued to batter northern and western Japan on Saturday (31 January) leaving cities buried under record levels of snowfall and prompting warnings from authorities. Aomori city in northern Japan recorded 167 centimetres of snow by Friday - the highest January total since 1945.
The United States accused Cuba of interfering with the work of its top diplomat in Havana on Sunday (1 February) after small groups of Cubans jeered at him during meetings with residents and church representatives.
Talks with the U.S. should be pursued to secure national interests as long as "threats and unreasonable expectations" are avoided, President Masoud Pezeshkian posted on X on Tuesday (3 February).
Early voting for Thailand’s parliamentary elections began on Sunday (1 February), with more than two million eligible voters casting ballots nationwide ahead of the 8 February general election, as authorities acknowledged errors and irregularities at some polling stations.
At least 12 people were killed and seven wounded after a Russian drone struck a bus carrying miners in Ukraine's southeastern Dnipropetrovsk region, government officials said on Sunday (1 February).
U.S. stock markets finished mixed on Wednesday (28 January) as investors reacted calmly after the Federal Reserve left interest rates unchanged, a decision that had been widely expected and largely priced in.
The S&P 500 edged to a record closing high on Tuesday, marking its fifth consecutive day of gains, as strong advances in technology stocks offset a sharp selloff in healthcare shares and a mixed batch of corporate earnings.
Chevron is in talks with Iraq’s oil ministry over potential changes to the commercial framework governing the West Qurna 2 oilfield, one of the world’s largest producing assets, after Baghdad nationalised the field earlier this month following U.S. sanctions imposed on Russia’s Lukoil.
Argentina's economic activity shrunk 0.3% in November compared with the same month last year, marking the first monthly contraction of 2025, data from Argentina's national statistics agency showed on Wednesday.
Wall Street closed sharply lower on Tuesday as global markets fell after U.S. President Donald Trump’s new tariff threats against Europe unsettled investors and revived fears of renewed volatility.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment