Stock Market Retreat: Dow, S&P 500, and Nasdaq Hit Hard as Tech Sector Struggles

Feb 8, 2026, 2:19 AM

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US stocks faced substantial declines on Thursday as the tech sector continued its downward spiral, prompting a broader market sell-off. The Dow Jones Industrial Average fell by over 500 points, closing down about 1.1%, while the S&P 500 and Nasdaq Composite dropped roughly 1.2% and 1.5%, respectively.

This ongoing tech rout has raised concerns among investors about the potential disruption caused by artificial intelligence (AI) to established software companies. Recent earnings reports indicate that major players are ramping up their AI investments, which has led to a reevaluation of stock valuations in the tech space. Alphabet, the parent company of Google, revealed plans to increase its AI spending to $185 billion, contributing to investor unease and a drop in its share price.

Market sentiment has also been affected by negative signals from the labor market. Weekly jobless claims exceeded expectations, and job openings fell to their lowest level since 2020. Additionally, January saw the highest number of layoffs since the global financial crisis, further compounding worries about economic stability. The upcoming jobs report from the Bureau of Labor Statistics is anticipated to provide further insights into the employment situation.

In the commodities market, silver prices plummeted as much as 17%, erasing gains from previous days. Concerns over the sustainability of recent rallies in precious metals have led to increased volatility, particularly with the recent sell-off in the crypto market, where Bitcoin fell below $63,000, marking its lowest level since 2024. This decline wiped out gains accumulated during the previous administration, reflecting a growing crisis of confidence among investors in the cryptocurrency space.

As investors await Amazon's earnings report, attention remains focused on the performance of its AWS cloud unit, which is projected to show a 21% increase in sales. The results may influence market dynamics, especially as traders weigh the implications of continued AI investments and their impact on tech stocks.

Overall, the current state of the stock market indicates a cautious approach among investors, driven by fears of economic slowdown and the ramifications of rapid technological advancements in the sector. As the sell-off intensifies, market participants are left to navigate a landscape marked by uncertainty and volatility, with many anticipating further shifts in strategy as economic indicators unfold in the coming weeks.

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