Tech Rout Intensifies As Angst Over AI Deepens

 

 

“Investors drove stocks to records betting that artificial intelligence will change the way that U.S. companies do business. Glimpses of that potentially far-reaching impact have become evident in recent days -- and Wall Street is spooked.

 

Major U.S. indexes slid on Thursday, weighed down by new worries that AI will hurt the long-term outlook of tech, financial and logistics companies. The S&P 500 dropped 1.6%, while the Dow declined 1.3%, or 670 points. The Nasdaq led losses, retreating 2%.

 

Recent downswings have swept up a range of stocks, from data providers and the Magnificent Seven to wealth managers and trucking companies, with a breadth and intensity that has surprised some investors.

 

On Thursday, for example, a Florida firm called Algorhythm Holdings said it could use AI to improve efficiency in the trucking business. In the wake of that news release -- from a company that recently focused on selling karaoke machines -- shares of airlines, railroads and trucking firms slid. In the end, the declines shaved more than $17 billion in market value off companies in the Dow Jones Transportation Index, according to Dow Jones Market Data.

 

C.H. Robinson shares lost around 15%, their worst one-day decline since 2019. Expeditors International of Washington fell 13%, its worst day since 1998.

 

That drop highlighted how AI fears have rolled through different parts of the market in recent sessions.

 

On Monday, it was insurance brokers, hit by news that OpenAI was adding an app for homeowner insurance quotes.

 

On Tuesday, wealth managers and brokerage stocks fell after news of an AI tool for tax-planning strategies.

 

And last week, news of an AI assistant that could handle some legal and research tasks rippled across the entire software sector, sparking a selloff that dragged down Salesforce, PayPal and Thomson Reuters.

 

"It's 'shoot first, ask questions later,'" said David Wagner, portfolio manager and head of equity at Aptus Capital Advisors. "One part of the market is a funding mechanism for another, and then the next day it switches."

 

As technology and finance stocks fell, traders piled into shares of businesses they are betting will be insulated from any AI shocks to the economy: consumer staples and utilities, including companies such as Walmart or the electricity provider Exelon Corp.

 

"Investors are so jittery about the implications of AI, both good and bad," said Ed Yardeni, president of Yardeni Research. "Right now, they're focusing on the disruptive aspects of it."

 

Concerns about outsize spending at the tech companies funding the AI build-out have also lingered. Shares of Amazon notched their eighth consecutive daily decline on Thursday. Last week, the retail giant unveiled plans for a massive increase in AI-related spending. Apple stock declined 5%.

 

An exchange-traded fund that tracks the members of the Magnificent Seven -- Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla -- closed in correction territory, having dropped 10% from its October highs.

 

Other popular bets unwound too. Gold futures lost 2.9%. Silver slid 9.8%, continuing a streak of highly volatile trading.

 

Shares in AppLovin slid 20% even after the advertising software company sought to play down AI worries as it released earnings. Networking company Cisco Systems dropped 12%, as shareholders focused on the firm's narrowing margins.

 

Investors sought shelter in government bonds, driving the yield on the benchmark 10-year Treasury note to a two-month low of 4.103%, according to Tradeweb. Yields, which fall when bond prices rise, added to declines after a $25 billion auction of 30-year Treasury bonds met with extremely strong demand from investors.

 

Primary dealers, financial institutions that are required to bid at government debt auctions, took down only 5.9% of the sale.

 

That was the lowest on record for a 30-year bond auction, according to BMO Capital Markets, a sign that other investors had bid aggressively for the bonds.

 

Traders have been rotating out of richly priced tech shares into blue-chip, small-cap and other more diversified stock picks since late 2025. But in recent weeks, that rotation has been choppier, with small daily moves in the indexes painting over sharper undulations underneath the hood.

 

The intensity of some single-name moves has left even some pros scratching their heads.

 

"I'm looking at the board trying to figure out what story to make of today, and there's just a lot of days like that," said Patrick Ryan, chief investment strategist at Madison Investments. He said the volatility in recent weeks has left himself and other investors feeling "awestruck and dumbfounded at times."” [1]

 

1. Tech Rout Intensifies As Angst Over AI Deepens. Lang, Hannah Erin.  Wall Street Journal, Eastern edition; New York, N.Y.. 13 Feb 2026: A1.