Wall Street Falls Early as Tech Selloff Deepens

Key Moments

Major U.S. equity benchmarks opened sharply lower. The S&P 500 fell 1%, the NASDAQ Composite dropped 1.3%, and the Dow Jones Industrial Average slipped 0.6%.
Technology stocks remained under heavy pressure after steep post-earnings declines in Alphabet (NASDAQ: GOOGL) and Qualcomm (NASDAQ: QCOM). Concerns around AI-related spending and valuations added to the weakness.
U.S. job cut announcements rose to 108,435 in January, the highest January total since 2009. The figure was nearly triple December’s level, lifting market-implied odds of a March Federal Reserve rate cut.

Early Trade: Major U.S. Indexes Under Pressure

U.S. equities moved sharply lower at the open on Thursday. Selling was concentrated in large-cap technology names, following fresh earnings disappointments and renewed macroeconomic concerns.

At 09:32 ET (14:32 GMT), the S&P 500 was down 1% at 6,815.77. Meanwhile, the NASDAQ Composite slid 1.3% to 22,613.21, weighed down by growth stocks. The Dow Jones Industrial Average fell 0.6% to 49,193.27.

In addition, investors digested new labor market data on corporate job cuts. That data added to the cautious tone across risk assets.

Technology Stocks Extend Slide After Earnings Hits

Wall Street ended Wednesday’s session mixed, as continued rotation out of technology stocks weighed on the S&P 500 and NASDAQ. Software names have faced sustained selling amid concerns over how artificial intelligence may reshape business models.

That weakness later spread to semiconductor stocks. Markets focused on elevated AI investment plans and what many see as stretched valuations.

Alphabet drew renewed scrutiny after outlining capital expenditure plans of up to $185 billion in 2026. The figure came in well above expectations. As a result, Class A shares fell more than 6% as investors reassessed the spending outlook.

“While the Google capex number might help a bit, it’s unlikely the semiconductor bloodletting will last just a single day,” said Adam Crisafulli of Vital Knowledge.

Meanwhile, Qualcomm shares dropped 8.7% after the company issued quarterly guidance well below forecasts. Management cited a global memory chip shortage, which it expects to weigh on mobile phone sales and device demand.

Deutsche Bank’s Jim Reid said the recent selloff reflects a broader shift in market leadership.

“However, it wasn’t all bad news,” Reid noted. “The rotation out of tech helped push the equal-weighted S&P 500 to a record high, while Europe’s STOXX 600 also closed higher.”

He added that Alphabet’s capex plan is a key story for markets, given the stock’s strong performance over the past six months.

Corporate Earnings Lineup

The earnings calendar remained active on Thursday. Tapestry (NYSE: TPR) and Peloton Interactive (NASDAQ: PTON) reported before the open. Amazon (NASDAQ: AMZN) was scheduled to release results after the close.

Labor Market: Layoff Announcements Spike

Market sentiment was further pressured by new labor market data from Challenger, Gray & Christmas. The firm reported 108,435 announced job cuts in January, the highest January level since 2009.

The total was also roughly three times December’s figure of 35,554 job cuts.

Mohamed El-Erian, former CEO of Pimco, described the data as sobering.

“Most notably, these layoffs are occurring while GDP continues to grow near 4%,” El-Erian said. “This deepens the decoupling between employment and economic growth.”

Policy, Claims Data, and Fed Rate Expectations

Separately, Reuters reported that the Trump administration completed an overhaul of the U.S. civil service system. The changes give the president authority to hire or dismiss roughly 50,000 federal employees.

Investors also reviewed weekly jobless claims data. Initial claims rose to 231,000, above expectations. Continuing claims increased to 1.844 million, though that reading was slightly lower than forecast.

As a result, market-implied odds of a 25-basis-point rate cut by the Federal Reserve in March moved higher. Probabilities climbed to nearly 18%, up from about 9% the day before.

The Federal Reserve held its benchmark rate steady last week at a 3.5% to 3.75% range, following three cuts in 2025.

Metals and Energy: Sharp Pullback Across Commodities

In commodities, precious metals reversed earlier gains. Gold turned lower, while silver posted a steep decline that erased a brief rebound.

The broader metals selloff resumed as the U.S. dollar strengthened ahead of key European central bank meetings.

Silver was the weakest performer. Spot silver fell as much as 16% to $73.56 per ounce, while March futures touched a similar intraday low.

Oil prices also dropped sharply. The move followed reports that the U.S. and Iran agreed to hold talks in Oman on Friday, easing concerns over potential supply disruptions.