New York, Feb 5, 2026, 17:13 EST — Trading continues after the close.
- The Dow Jones Industrial Average dropped 1.2%, finishing at 48,908.72 amid another slide in mega-cap tech.
- Traders zeroed in on Big Tech’s rising AI buildout expenses and the uncertain timeline for those investments to boost profits.
- U.S. labor-market data revealed a rise in jobless claims alongside a drop in job openings, fueling ongoing debate over rate moves.
The Dow Jones Industrial Average dropped 1.20% on Thursday, closing at 48,908.72 and halting a brief rebound as investors offloaded tech-linked and high-growth stocks. The Nasdaq tumbled to its lowest level since November, while Amazon slid further in after-hours trading, highlighting market nerves over major AI investments.
The worry isn’t AI demand—it’s the cost. Alphabet projects capital spending, or capex, to hit between $175 billion and $185 billion in 2026 as it ramps up data centers and computing power. CEO Sundar Pichai told analysts these AI investments are already fueling revenue and growth. But investors focused more on the hefty price tag than on the growth prospects.
Amazon raised its capital spending forecast to $200 billion for 2026, up sharply from $131 billion in 2025. The announcement sent its shares tumbling as much as 11% in after-hours trading, as investors digested the hefty price tag for expanding its AI infrastructure.
Economic data weighed on sentiment. Weekly jobless claims climbed by 22,000, hitting 231,000, while job openings dropped to 6.542 million in December — the lowest since September 2020. Citigroup economist Gisela Young noted claims might remain “distorted” soon due to severe weather. Reuters
The Dow slipped a day after squeezing out a gain while the Nasdaq tumbled, underscoring that this week’s trading has been anything but a straight panic. On Wednesday, the Dow rose 0.53%, even as the Nasdaq dropped 1.51%, reflecting a patchy rotation among sectors and investment styles.
Not everyone’s convinced AI will instantaneously upend the software sector. Blue Owl co-CEO Marc Lipschultz dismissed the market’s sweeping response as “quite misguided” during a post-earnings call, pushing back on fears that software holdings face abrupt declines. Reuters
But earnings season continues to stir volatility. Qualcomm projected second-quarter revenue and profits falling short of expectations, citing a global memory-chip shortage squeezing smartphone output. CEO Cristiano Amon pointed to supply issues rather than demand, saying, “I just wish we had more memory.” Reuters
Outside of tech, Thursday’s session was uneven. Consumer discretionary and materials dragged the market lower, though a handful of consumer stocks attracted buying interest thanks to positive outlooks, despite broader caution weighing on other shares.
This selloff could reverse sharply. Should upcoming earnings reveal AI spending converting into cash flow sooner than expected, dip-buyers may rush back. If that doesn’t happen, though, expect the market to slide further as investors continue shedding pricey growth stocks.
Friday’s session will hinge on whether Amazon’s post-close drop spills over into the broader market at the open, and if the so-called “capex shock” starts to hit other major players. Traders are also eyeing next week’s crucial data: the delayed January U.S. jobs report due Feb. 11 at 8:30 a.m. ET, followed by the January CPI inflation numbers on Feb. 13, also at 8:30 a.m. ET. bls.gov
