Overview
U.S. stocks closed sharply lower on Thursday, February 5, 2026. I characterize the session as “a convergence of AI monetization doubts and weakening labor data.” Concerns that massive AI investments may not translate into sustainable profits, combined with disappointing employment indicators, triggered another wave of broad-based selling.
Market Summary
- Indexes slide: The S&P 500 fell -1.2%, while the Nasdaq suffered its worst three-day decline since April.
- AI skepticism: Investors are increasingly questioning whether heavy tech spending can deliver tangible revenue and earnings growth.
- Big Tech capex: Large-scale investment plans intensified concerns about margin pressure.
Corporate Highlights
- Google (Alphabet): Shares dipped after the company warned that 2026 capital expenditures could reach as high as $185 billion.
- Amazon: Shares sold off after earnings, as the company announced plans to invest nearly $200 billion this year in data centers and equipment.
- Software sector: Rapid AI tool development is increasingly seen as a threat to traditional software demand and margins.
Labor Data Pressure
- December JOLTS job openings unexpectedly dropped to the lowest level since 2020.
- Layoffs edged higher, while January job-cut announcements reached their highest level since the 2009 financial crisis.
- I see this as an early signal that labor market weakness is becoming a material macro risk.
Bitcoin & Risk Assets
Bitcoin plunged below $64,000 amid forced selling, losing nearly half its value since October. All gains following Donald Trump’s election victory have now been erased. Rising geopolitical tensions and risk-off sentiment triggered redemptions, deleveraging, and a self-reinforcing selloff across speculative assets.
Analyst Takeaways
- Recent labor data reinforce the view that the U.S. job market has not fully recovered.
- Software companies are increasingly viewed not as AI beneficiaries, but as potential casualties of AI disruption.
- This pullback is best described as a valuation reset across growth sectors.
Feb 6, 2026 (Fri) – Key Events (KST)
| Time (KST) | Event |
|---|---|
| 00:00 | U.S. Feb Michigan Inflation Expectations |
| 00:00 | U.S. Feb Michigan Consumer Sentiment |
| 02:00 | Fed Vice Chair Jefferson Speech |
| 03:00 | U.S. Baker Hughes Rig Count |
Bottom Line
In my view, this selloff reflects more than a technical pullback. It marks a period where AI optimism is being recalibrated against real earnings and labor-market realities. With tech’s heavy index weighting, volatility is likely to remain elevated in the near term.
