New York, February 5, 2026, 10:02 (EST) — Regular session
The Dow Jones Industrial Average dropped roughly 300 points Thursday morning, dragged lower by Amazon and Microsoft amid renewed concerns about Big Tech spending and demand. The Dow slipped 298 points, or 0.6%, to 49,203. The S&P 500 lost 0.8%, and the Nasdaq fell about 0.9%.
This shift is significant as the Dow has stood out as a rare stable spot amid a turbulent week, with funds flowing out of pricey tech stocks into safer havens. That rotation hasn’t been smooth, though, and investors are now viewing the new AI legislation more as a short-term expense headache than a catalyst for future expansion.
Investors are facing a shortage of clear signals. Corporate earnings continue to trickle in, while the U.S. data schedule has been shuffled following a brief government shutdown. That’s pushed traders to rely more heavily on earnings reports and intraday price swings.
The Dow climbed 0.53% to close at 49,501.30 on Wednesday, even as the wider market took a hit. The S&P 500 dropped 0.51%, and the Nasdaq slid 1.51%, highlighting the growing divide between traditional industrials and tech stocks. “The market is suddenly skeptical and concerned about it,” said Jed Ellerbroek, portfolio manager at Argent Capital, pointing to worries over the speed and size of AI investment. Reuters
Alphabet stirred the pot by projecting its 2026 capital expenditure—money funneled into long-term assets like data centers and servers—could soar to between $175 billion and $185 billion, up sharply from $91.45 billion in 2025. The Google parent flagged rapid cloud growth as the driver, though investors quickly questioned how soon those hefty outlays will start paying off.
Qualcomm weighed on sentiment after warning its quarterly results would miss Wall Street’s forecasts, citing a global memory-chip shortage that’s hitting smartphone sales, particularly in China. The chipmaker forecast revenue between $10.2 billion and $11.0 billion, with adjusted earnings of $2.45 to $2.65 per share. Shares plunged sharply in after-hours trading.
Dow traders have their sights on Amazon, which is set to release earnings after Thursday’s close. Analysts are calling for earnings of $1.97 per share and predict a 5.4% jump in physical store revenue to $5.9 billion, according to LSEG estimates cited by Reuters. But the real focus will be on Amazon’s outlook for AWS demand and its spending plans.
Labor news is back in focus alongside earnings. Planned layoffs hit 108,435 in January, marking the highest January figure since 2009, according to Challenger, Gray & Christmas. UPS made up a significant portion of the cuts, with Amazon also noted for trimming jobs. The report revealed hiring intentions remained weak.
The tech selloff has been swift. The S&P software and services index lost over $800 billion in market value in just six sessions, Reuters reported. Strategists now focus more on positioning than on fundamentals. John Hardy of Saxo highlighted the role of leverage, noting that margin lending—borrowing against stocks—could intensify the pressure if the selling picks up.
The Dow’s blend could still play to its advantage if investors stick with value and dividend-heavy stocks, or if Amazon’s results temper the hype around AI spending returns. On the flip side, bigger capex plans or soft guidance from megacaps might drag the Dow further into the tech selloff, despite its lower pure-tech weight compared to the Nasdaq.
Markets are now focused on the U.S. data calendar reset: the Bureau of Labor Statistics confirmed January’s jobs report will drop next Wednesday (Feb. 11), following the recent government shutdown. January’s CPI is set for release the following Friday (Feb. 13). Meanwhile, the December JOLTS report arrives Thursday.
