4:15pm: AI-fueled selloff
Wall Street wrapped up a mixed session on Wednesday, with investors digesting a fresh wave of earnings and bracing for Alphabet’s (GOOG, GOOGL) results.
The Nasdaq led the laggards, sliding 1.5% to 22,905, weighed down by a continued selloff in software and tech stocks. The S&P 500 also dipped 0.5% to 6,883, while the Russell 2000 fell 0.9% to 2,624. In contrast, the Dow Jones climbed 0.5% to 49,501, buoyed by defensive and industrial shares.
AI-driven disruption fears triggered a rush out of software stocks. Advanced Micro Devices (AMD) tumbled after warning that its sales outlook may limit its ability to compete with AI heavyweight Nvidia.
Investors also got a peek at the labor market, with ADP reporting that employers added just 22,000 jobs in January—well below expectations of 45,000. With federal jobs data delayed by last week’s partial government shutdown, private reports like ADP’s are taking on extra significance. The official Bureau of Labor Statistics report is now scheduled for next Wednesday.
In commodities, gold tried to recover amid US-Iran tensions but stumbled back below $5,000 an ounce after an earlier rebound. Bitcoin also faced headwinds, trading near $72,000 as losses piled up in the cryptocurrency market.
3:45pm: Proactive news headlines
- Fineqia International Inc (FNQ) noted global crypto ETPs fell 5.1% in January 2026, outperforming the broader digital asset market, which declined 10%.
- M2i Global Inc (MTWO) & Volato Group said Titanium X shipped its first titanium ore from Western Australia to the U.S., marking an initial step in developing critical mineral supply chains.
- Trust Stamp Inc (IDAI) filed a U.S. trademark for “WOW,” its consumer-facing biometrically secured “Wallet of Wallets” product for managing multiple digital asset wallets.
- Nextech3D.AI (NTAR) partnered with The Squadron to offer high-fidelity F-35 flight simulations through its Krafty Lab platform for corporate leadership and team-building events.
- Immunic will present new analyses from its Phase 2 CALLIPER trial of vidofludimus calcium in progressive multiple sclerosis patients at the ACTRIMS Forum 2026.
2:50pm: Market movers
- Advanced Micro Devices Inc (AMD) analysts praised AMD’s Q4 2025 results as solid, though growth in AI-related data center sales was seen as partly one-time, contributing to a post-earnings sell-off.
- The New York Times Company (NYT) delivered strong 2025 results driven by digital subscription growth, rising digital ad revenue, and expanding margins, adding 1.4 million new digital subscribers.
- Uber Technologies Inc (UBER)’s Q4 revenue beat expectations with strong ride-hailing and delivery demand, while adjusted EPS fell short of estimates despite 22% growth in trips.
- Take-Two Interactive Software Inc (TTWO) reported strong Q3 2026 revenue and raised its full-year outlook, yet shares fell over 3% following the earnings release.
- Super Micro Computer Inc (SMCI) shares jumped after Q2 results and forward guidance exceeded expectations, reflecting robust demand for AI-focused infrastructure hardware.
- Eli Lilly posted Q4 revenue and EPS well above estimates, driven by strong demand for its weight-loss treatments, sending shares up 9.5%.
2:10pm: Eli Lilly's big boost from weight loss drugs
Eli Lilly and Co (NYSE:LLY) shares surged 9.2% Wednesday afternoon after the drugmaker posted fourth-quarter results that topped Wall Street expectations and issued a robust forecast for 2026, fueled by soaring demand for its weight‑loss treatments.
The company reported revenue of $19.29 billion for the fourth quarter, up 43% from a year earlier and well above analysts’ estimate of $18.01 billion. Adjusted earnings per share climbed 42% to $7.54, beating the Street’s forecast of $6.99.
Growth was led by its weight‑loss drugs Mounjaro and Zepbound. Mounjaro generated $7.41 billion in sales, up 110% year-on-year, while Zepbound contributed $4.26 billion, up 123% from the prior year. Both exceeded consensus expectations.
12:45pm: AMD slides post-earnings
AMD shares are down more than 17% following its latest earnings report, even as the company beat revenue expectations.
Wedbush noted the outperformance was driven by stronger-than-expected results in Data Center and Client segments, though much of the data center upside came from MI308 shipments to China, a one-time benefit that tempers AI-related growth expectations. Gross margins of 57% also exceeded consensus, partly due to inventory write-ups.
Looking ahead, AMD’s Q1 guidance topped prior expectations by $300 million, though about $100 million of the upside is again linked to MI308 shipments to China. Wedbush highlighted that ongoing CPU shortages could allow AMD to capture incremental value through higher volumes, optimal product mix, and pricing, even if these benefits were not fully reflected in recent results.
The firm reiterated its constructive view, citing AMD’s strong server CPU position and potential to scale into AI workloads. Management forecasts revenue growth exceeding 35% over the next 3–5 years.
11:35am: Reassessing the AI boom
The recent software selloff reflects investors’ rapid reassessment of the sector in the AI era, according to Nigel Green, CEO of deVere Group.
Green argues that AI is fundamentally reshaping pricing power for subscription-based software, as automation can replicate tasks like legal review, data analysis, and compliance almost instantly. Green explains: “The selloff is not about fear of AI — it’s about what software businesses can realistically charge in an AI-first world.”
He adds that markets are now distinguishing between companies that control AI economics and those that merely integrate it to protect existing businesses, with the former likely to expand margins and the latter facing pressure on costs and pricing.
The selloff represents a “valuation reset driven by economics,” as AI exposes once-stable recurring revenue to disruption and compresses value chains, concentrating returns among a few firms while challenging many others.
10:45am: ISM services index lower in January
The US service sector continued to expand in January, with the ISM Services PMI holding steady at 53.8, slightly above expectations of 53.5 but down from December’s 14‑month high of 54.4. While headline growth suggests strength, underlying details point to more modest expansion: new orders fell 3.4 points to 53.1, indicating demand remains firm but less robust than last month’s spike implied.
Wells Fargo noted that the data highlights persistent price pressures amid a soft labor market. Some survey respondents expressed cautious optimism for the year, citing stabilizing business activity, ongoing uncertainty around tariffs, and developments in AI and data center construction.
10am: Nasdaq opens lower as AMD fuels further tech slide
Wall Street has got off to a mixed start, with big tech stocks weighing.
The Dow Jones has opened up 0.2%, led by Amgen, Apple and Merck, but despite gains of 15% for Super Micro Computer and 12% for MGM Resorts the S&P 500 has dropped 0.3% and Nasdaq 0.7%.
Among the largest names, Nvidia, Amazon, Meta, Tesla, Broadcom and Micron were all in the red in early trade.
Biggest falls were seen at Applovin, AMD and Palantir Technologies, down 15.7%, 13% and 6.7%.
More positive news comes from across the Atlantic, with the FTSE 100 flying in London, up 1.5% as the less tech-heavy index finds money flowing in.
8.05am: Dow called higher but Nasdaq lower
A mixed start for US stocks was the expectation ahead of Wednesday's opening bell, as traders continue to mull the possible effects of AI on a range of sectors.
Dow Jones futures were up 0.2% and those for the S&P 500 were up 0.1%, while Nasdaq futures were pointing to a fall of 0.2%.
The previous day, the tech-heavy Nasdaq had dropped 1.4% to 23,255, while the S&P fell 0.8% to 6,918 and the Dow slipped 0.3% to 49,241.
The Russell 2000 was a rare bright spot, rising 0.2% to 2,646.
It was "a pretty brutal day in markets... that wouldn’t be obvious with a quick glance of the screens," said Deutsche Bank macro strategist Jim Reid, as a majority of the S&P 500’s constituents rose on the day.
The trigger was Anthropic launching a new AI automation tool servicing legal work, which investors first perceived as a threat to legal and financial data firms, then software and other related stocks.
Thomson Reuters, LegalZoom, ServiceNow, Palo Alto Networks, Cognizant and Datadog fell betweemn 17% and 7%, followed by the overall US software index dropping 4.6%, with 104 decliners and only nine risers.
It was the sixth successive decline for the software index to put it back to levels seen last April, with Microsoft down 2.9% on the day and down 24% from its peak in late October.
"Yesterday marked a dramatic acceleration of the trend we’d seen of late, and it means the nine worst-performing companies in the S&P 500 YTD are all in the software and related services sectors, having now seen declines of 25% or more," said Reid.
"While the question over the end-winners from AI is unlikely to be answered in 2026, recent months have seen a clear shift in markets from AI euphoria towards more differentiation between companies, and growing concern about its disruption to existing business models."
As the tool can automate a lot of legal work, market analyst Neil Wilson at Saxo said it was "another example of how AI is disrupting software and data analytics, and how we will see winners and losers".
Speaking at an event, Nvidia boss Jensen Huang said the "notion that the tool in the software industry is in decline, and will be replaced by AI ... It is the most illogical thing in the world, and time will prove itself".
Another blow to the AI trade arrived after the closing bell with AMD warning of weaker first-quarter sales, sending shares down 9.6% after-hours.
Earnings from life sciences names are coming out premarket, including Eli Lilly, Abbvie, Novartis and Novo Nordisk, along with Uber, before Google parent Alphabet and Qualcomm after the closing bell.