2026-02-05 22:05
publication
2026-02-05 22:05
Thursday was the third day in a row that investors sold technology and IT stocks. There are more and more doubts surrounding the AI sector. The market is asking whether such high valuations are justified in the light of the profits that can be achieved.
The S&P500 index ended Thursday at 6,798.10 points, which translated into a regression of 1.23%. It was the third downward session for this benchmark and thus the S&P500 stopped at the support set by the January minimum.
After losing 1.59%, the Nasdaq Composite reached 22,540.59 points. and thus reached the lowest level since November. The Dow Jones industrial average dropped below 49,000 points after losing 1.20%.
Once again, the decline was led by shares of large technology companies, which had been Wall Street's favorites for the previous three years. But over this time, their valuations have gone so high that investors are increasingly asking themselves whether this is not another speculative bubble. Today, Microsoft's shares were depreciated by almost 5%, and Amazon by 4.4%. There is also a panic in the IT sector, where Palantir's stock dropped by almost 7%, Oracle by 7% and Salesforce by almost 5%.
– For the first time we see large technology companies – all these Microsofts, Alphabets and Amazons – going through a really large investment cycle. And we observe doubts as to whether these investments will ultimately translate into financial results, explained Tom Hainlin, investment strategist at US Bank Wealth Management, quoted by Reuters.
While in the case of big tech companies there is a fear that the AI revolution will allow them to make money, in the case of classic IT companies there is a fear that algorithms will replace programmers and everyone will be able to write their own software. It is because of these concerns that the quotations of ServiceNow, Salesforce and other providers of, in fact, not very complicated IT systems are skyrocketing.
There were also violent market reactions to quarterly reports of listed corporations. Estee Lauder shares fell by nearly 20% after the cosmetics manufacturer's earnings were disappointing. Snap's stock tumbled more than 13% even as the company beat expectations on revenue.
We also received data indicating a further deterioration in the economic situation on the American labor market. In December, the number of job vacancies dropped by nearly half a million, to 6.54 million, according to the JOLTS survey. A slight increase in unfilled jobs was expected, to 7.2 million. However, in January, American corporations announced the layoff of as many as 108,44 thousand. employees – according to the Challenger Report. This is three times more than a month ago and is one of the highest results in recent years.
There has also been a negative move in the recently sensationally strong weekly statistics on unemployment benefits. 231,000 people applied for benefits. Americans against 209 thousand a week earlier and the market consensus at 213,000. Although Wall Street has been ignoring increasingly worse signals from the labor market for many months, in the long run the entire US economy (and a large part of the profits of listed companies) depends on the strength of the American consumer. And he probably won't spend more if he ends up unemployed en masse.
K.K
