Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 9, 2026.
Brendan McDermid | Reuters
Stocks dropped on Thursday as investors began to worry about the negative side of the artificial intelligence buildout, which threatens to disrupt the business models of whole industries and raise unemployment.
The Dow Jones Industrial Average shed 530 points, or 1.1%, led lower by Cisco Systems, which slid 11% after the maker of networking hardware such as switches and routers issued disappointing guidance for the current quarter. The S&P 500 dropped 1.1%, while the Nasdaq Composite lost 1.5%.
Dow Jones Industrial Average, 1-day
Certain pockets of the stock market have been hit this year on the release of AI tools that could replicate their businesses — or at least eat away at their profit margins.
Financial stocks such as Morgan Stanley came under pressure on fears that AI would disrupt wealth management businesses, while shares of trucking and logistics companies such as C.H. Robinson plummeted 22% on fears that AI would streamline freight operations, thereby weighing on certain revenue lines.
AI disruption fears even spread to the real estate sector, hurting stocks like CBRE and SL Green Realty, on the notion higher unemployment will hit demand for office space.
Software stocks — a group that has been plagued by disruption worries in recent weeks — extended their year-to-date losses in the session, with Salesforce shares down 2%. That stock’s fall this year stands at more than 31%. Shares of Autodesk dropped more than 5%, and its year-to-date slide is now 26%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 3% — the fund now stands about 32% below its recent high.
“That’s just pure like crowd psychology, in my opinion. It’s sell first and kind of do the analysis later, but don’t get stuck holding the bag,” Ross Mayfield, investment strategist at Baird, said about the recent sell-off. “The money coming out of software has places to go.”
A sell-off in silver, which has been a hot trade amongst the retail investor crowd this year, added to the risk-off mentality Thursday. Silver futures tumbled by 9%.
Investors sought safety in more defensive areas of the market. Walmart and Coca-Cola shares were up 3% and 2%, respectively, and consumer staples and utilities led the gains among S&P 500 sectors, rising more than 1% each.
Stocks ended the previous session lower after earlier rallying off the back of a strong jobs report. Enthusiasm for the data waned as economists doubted it could be the start of a trend higher in payrolls, especially when accompanying revisions in the report indicated there was zero job growth in the back half of 2025.
Traders now brace for a key inflation report Friday. Economists polled by Dow Jones are expecting January CPI to show a 0.3% increase for both headline and core, which excludes food and energy prices.
“CPI is a little bit less important now that we got the good jobs number, because it already allows the Fed to kind of pause for a substantial amount of time,” Mayfield said. “If CPI came in hot, you’d have a couple of months of data to kind of get a sense of the trend before the Fed actually has to make a hard call.”
On the flip side, if the data were to come in light, the strategist anticipates that Friday could be a risk-on kind of day, though “it would have to be a pretty, pretty brutal number to the upside to really impact equity markets and fed fund futures,” he added.