NEW YORK, Feb 3, 2026, 15:19 EST
- U.S. stocks dropped Tuesday, with software and major tech firms taking the biggest hits.
- Alphabet and Amazon head a crowded week of earnings that investors are closely watching.
- Key labor-market data has been delayed due to a partial U.S. government shutdown.
Wall Street dipped Tuesday, dragged down by software stocks rattled over worries that emerging AI tools could tighten margins and shift the competitive landscape. Investors also grappled with a flood of earnings reports from major U.S. firms.
The drop came after a quieter start before the bell, as futures—those contracts tracking indexes outside regular trading hours—edged up. Teradyne, the chip-testing gear maker, soared over 20% on a strong forecast. “It’s been a more orderly and calmer affair across markets,” said Chris Weston, head of research at Pepperstone. https://www.kitco.com/news/off-the-wire/20…
Monday pushed major indexes close to record highs, positioning the market for smooth sailing as earnings roll in from key players in tech, consumer, and healthcare sectors.
By early afternoon in New York, the Dow had slipped about 0.8%, while the S&P 500 fell roughly 1.2%. The Nasdaq took a sharper hit, dropping close to 2%. Treasury yields pushed higher, with the 10-year rising about 10 basis points — that’s one-hundredth of a percentage point — as investors offloaded bonds.
Tech stocks took the brunt of the sell-off. Nvidia and Microsoft slid, while Alphabet and Amazon dipped as investors braced for their upcoming earnings reports this week.
Wall Street shifted focus to software companies viewed as at risk if AI drives down costs for customers to build, code, and automate themselves. Anthropic’s rollout of a legal tool for its Claude chatbot only intensified those concerns.
“We’re seeing plenty of software names viewed as potential targets for disruption,” said Art Hogan, chief market strategist at B. Riley Wealth.
Salesforce, Adobe, Synopsys, Datadog and Atlassian all took a significant hit, with Intuit dropping even further. The S&P 500 software and services index looked set for yet another sharp daily decline.
Not all AI-linked stocks took a hit. Palantir climbed following its late Monday earnings report, while investors eyed Advanced Micro Devices’ post-close update for signs on demand for AI-centric chips.
Healthcare stocks took a hit as Novo Nordisk warned of a sharp drop in annual sales. Shares of the company’s U.S.-listed stock plunged, dragging down competitors like Eli Lilly and other makers of obesity drugs.
A handful of big-cap names stood out. Walmart touched a $1 trillion valuation briefly, while PayPal dropped sharply after predicting 2026 profits below expectations. Disney’s stock slipped following the appointment of theme parks chief Josh D’Amaro as CEO.
The real challenge lies in this week’s calendar. About a quarter of the S&P 500 companies are set to report, with analysts expecting around 11% earnings growth for the December quarter, according to LSEG.
One snag: Washington. The U.S. government partially shut down over the weekend, pushing back the January employment report and the JOLTS — the Job Openings and Labor Turnover Survey — that investors rely on to assess the labor market.
The setup can turn quickly. A major beat or miss from Alphabet, Amazon, or AMD could shake sentiment. And any breakthrough—or stalemate—on the shutdown might shift the schedule for upcoming economic data.
