U.S. equities fell for another session as investors took a risk-off stance, with the Dow shedding about 592 points (1.20%), the S&P 500 losing 1.23% to close at 6,798.40, and the Nasdaq Composite declining 1.59% to settle at 22,540.59. The stock market today shows no sign of stabilizing as technology stocks continue their sharp decline, sending ripples across the entire financial sector.
Two major factors are crushing investor confidence. First, Alphabet projected a significant increase in AI spending with capex of $185 billion, which was enough to spook investors because it raises free cash flow concerns. Second, Amazon shares tumbled 7% after reporting $1.95 in earnings per share in the fourth quarter, narrowly missing the consensus forecast of $1.97. AI-driven tech selling and weak labor data pressured sentiment, amplifying the downturn. The combination has created a perfect storm for equity investors who've watched mega-cap tech names deliver disappointing results.
Automaker Stellantis tumbled 20% after announcing a wide-ranging business reset costing $26 billion. Software and chipmakers also took severe beatings, with fears of artificial intelligence disrupting software companies' business models sending the iShares Expanded Tech-Software Sector ETF down more than 24% to start 2026, intensifying this week after AI-startup Anthropic announced new legal and finance capabilities for its Claude Cowork agent. Even crypto got battered, with Bitcoin tumbling to around $63,000 in a selloff that cut its value by nearly half since October. If you're holding related stocks like Robinhood, the crypto connection matters.
Stocks rose on Friday, positioning the market for a positive end to a volatile week, with the S&P 500 adding 0.9%, the Nasdaq Composite trading up 0.8%, and the Dow Jones Industrial Average advancing 573 points or 1.1%. This bounce suggests some bargain-hunting is happening, though investors remain jittery about where valuations go from here.