New York, Feb 4, 2026, 05:56 EST — Premarket
- Dow futures climbed roughly 0.3% before the opening bell, rebounding from Tuesday’s decline
- Investors are zeroing in on how AI is squeezing software stocks and tightening margins
- Wednesday brings ADP private payrolls and Alphabet’s earnings report.
Dow Jones Industrial Average futures climbed 129 points, or 0.26%, hitting 49,479 in early Wednesday trading. This suggests a steadier start following Tuesday’s dip. Futures are contracts that reflect the index ahead of the regular session. Investing.com
Investor nerves remain frayed. Global software stocks extended their selloff into a second day, rattled by questions about whether emerging “AI agents” might undercut pricing power for companies dealing in data, research, and software. JP Morgan analyst Toby Ogg put it bluntly: “The sector isn’t just guilty until proven innocent but is now being sentenced before trial.” Reuters
Data risk has resurfaced. A four-day U.S. government shutdown has pushed back crucial releases like the January employment report and the December JOLTS job openings report from the Labor Department. Traders are now relying more on private surveys until officials can update the schedule. Reuters
The cash Dow fell 166.67 points Tuesday, closing at 49,240.99 after gaining 515.19 points the previous day. Since the index is price-weighted, a big shift in a high-priced stock can influence the overall number more than a similar percentage move in a lower-priced component. FRED
Tech and software stocks led the selloff Tuesday. The S&P 500 slipped 0.84%, while the Nasdaq dropped 1.43%, as investors worried AI might ramp up competition and squeeze software companies’ margins. “We’re looking at a lot of software names … that may well be disrupted,” said Art Hogan, chief market strategist at B. Riley Wealth. John Campbell, senior portfolio manager at Allspring Global Investments, added some sectors were “priced for perfection.” Reuters
All eyes turn to the ADP national employment report set for release at 8:15 a.m. ET. The final S&P Global services PMI follows at 9:45 a.m., with the ISM services index due at 10:00 a.m. Crude inventory data arrives at 10:30 a.m. ET, likely stirring moves in energy stocks. Investing.com UK
Some investors are watching commodities closely. Gold rallied over 3% Tuesday following a two-day slide. Analysts cite short covering and safe-haven buying fueled by fresh U.S.-Iran tensions. “It’s being driven by heightened geopolitical tensions,” said Soni Kumari, commodity strategist at ANZ. Reuters
However, the initial boost in Dow futures might not last. If jobs or services data come in stronger than expected again, bond yields could climb, reigniting the valuation concerns that have been weighing on tech and software stocks.
Alphabet is set to report earnings after Wednesday’s close, followed by Amazon later this week, with investors eager for clues on AI spending and its impact on returns. “The fundamentals are good and earnings are strong,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, but the market wants concrete proof. Reuters
