New York, Feb 4, 2026, 13:37 (EST) — Regular session
- Dow Jones slips in afternoon trading, erasing earlier gains
- Tech and software stocks weigh on the Nasdaq, pushing the gap between indexes wider
- Traders digest new jobs and services reports before Alphabet’s earnings drop after the bell
The Dow Jones Industrial Average edged lower Wednesday afternoon, shedding an early gain as tech stocks dragged the market down. By 1:37 p.m. EST, the Dow was off 47.77 points, or 0.1%, sitting at 49,193.22. The S&P 500 dropped 0.97%, while the Nasdaq Composite fell 2.17%.
The divergence is significant as the market continues to rethink parts of the AI trade. Investors have pulled back from software and chip stocks, worried that rapid AI advances might disrupt older subscription models. At the same time, some capital has shifted into more stable “value” shares. “If you’ve got legacy software that’s old and clunky, you’re a ripe target for AI,” said Josh Chastant, a portfolio manager at GuideStone Funds. Reuters
Economic signals failed to clarify sentiment. ADP’s private payrolls estimate showed January job growth slowing to just 22,000, while the Institute for Supply Management reported services activity remained steady even as input costs rose. “Not too hot, not too cold,” said Emily Roland, co-chief investment strategist at Manulife John Hancock Investments, noting the data barely moved the rate outlook. Investing.com
The Dow, which tracks 30 blue-chip U.S. companies by price, has weathered the tech sector’s toughest blows better than the Nasdaq. Still, the tape remained volatile, with traders juggling earnings reports and shifting rate forecasts.
Super Micro Computer raised its full-year revenue forecast to a minimum of $40 billion, up from $36 billion, driven by sustained demand for AI-optimized servers as clients boost data center capacity. CFO David Weigand noted on the post-earnings call that “order strength remains strong from large global data center and enterprise customers.” Reuters
Advanced Micro Devices bucked the trend, projecting first-quarter revenue around $9.8 billion, with a $300 million margin of error. The forecast added to investor jitters over AI hardware competition. “The expectations for large blowout quarters for AI-related hardware companies have skewed what the market is looking for,” said TECHnalysis Research president Bob O’Donnell. Reuters
A major concern is the tech selloff pulling the broader market down if top-tier earnings fall short or if investors start doubting the speed of monetizing the AI boom. Signs of a pickup in services inflation would also undermine the market’s hopes for rate cuts.
Investors now turn their attention to Alphabet’s earnings, set to drop after the bell, with Amazon’s report following on Thursday. Meanwhile, the market awaits word from the U.S. government on when the postponed payrolls and JOLTS job openings numbers will come out, after the partial shutdown wrapped up Tuesday.
