Stock Market Update

[BRIEFING.COM] Stocks had their toughest session of the week today, quickly ceding modest opening gains amid renewed pressure across software and mega-cap stocks and fears of broader disruption from AI elsewhere. 

The S&P 500 (-1.6%), Nasdaq Composite (-2.0%), and DJIA (-1.3%) finished lower across the board as weakness broadened throughout the session. The market's clear "risk-off" positioning led the Russell 2000 (-2.0%) and S&P Mid Cap 400 (-1.4%) to similar retreats. 

Weakness was first evident in the information technology sector (-2.7%), which closed as the worst-performing S&P 500 sector today. 

Software stocks came under renewed scrutiny after AppLovin (APP 366.91, -89.90, -19.68%) delivered a beat-and-raise earnings report but sold off sharply, finishing as the worst-performing S&P 500 component today. The iShares GS Software ETF (IGV) finished 2.7% lower. 

While memory storage stocks such as Sandisk (SNDK 630.29, +30.95, +5.16%) and Micron (MU 413.97, +3.63, +0.88%) finished higher after a retreat yesterday, they ended the day well off of their earlier highs, and weakness across other chipmaker stocks sent the PHLX Semiconductor Index 2.5% lower. 

Cisco (CSCO 75.00, -10.54, -12.32%) was another earnings laggard, with its warning that higher memory costs will be adversely affecting its profit margins weighing on other hardware names such as Dell (DELL 112.85, -11.31, -9.11%) and Apple (AAPL 261.73, -13.77, -5.00%). 

While the broadening out of leadership from tech into cyclical sectors has been a prominent headline in 2026, today's session did not follow that trend, with several notable retreats in the mix. 

This year's best performer, the energy sector, closed 2.2% lower amid a falling price of oil. Bloomberg reported that President Trump told reporters that he expects negotiations with Iran to be resolved over the next month, a development that helped crude oil futures settle today's session $1.72 lower (-2.7%) at $62.88 per barrel. 

The financials sector (-2.0%) was another laggard, expanding this week's losses to 4.8%. Robinhood Markets (HOOD 71.12, -6.85, -8.79%) continues to sink after its earnings release, while today saw an extension of yesterday's weakness across major banking names. There was some modest buying support across some financial services and insurance names that faced pressure in previous sessions amid concerns of AI disruption, but it was nowhere near enough to offset losses elsewhere. 

The AI disruption theme did have a tangible effect on the industrials sector (-1.2%) today, with courier stocks such as C.H. Robinson (CHRW 167.78, -28.55, -14.54%) and Expeditors Intl (EXPD 140.45, -21.44, -13.24%) finishing sharply lower. 

Elsewhere, mega-cap weakness weighed on the consumer discretionary (-1.6%) and communication services (-1.5%) sectors, sending the Vanguard Mega Cap Growth ETF 1.8% lower. Amazon (AMZN 199.60, -4.48, -2.20%) is yet to notch a higher finish after its earnings release last Thursday. 

Unsurprisingly, some more defense-oriented corners of the market garnered some rotational interest today. 

The utilities sector (+1.5%) captures the widest gain, with Exelon (EXC 47.55, +3.10, +6.97%) leading the advance after topping earnings estimates. 

The consumer staples sector (+1.2%) finished similarly, with Walmart (WMT 133.64, +4.87, +3.78%) adding to its impressive start to the year and finishing as the best-performing Dow component today. 

The real estate sector (+0.3%) also captured a modest gain. 

Ultimately, today's session saw the market give up some ground as AI disruption concerns mingled with this year's pattern of weakness in mega-cap tech. After a strong rebound effort on Friday and several uneventful sessions this week, it is almost easy to forget that the major averages logged losses of 1.0% or wider across the board last Thursday as well. However, the retreat today showed that recent headwinds have not yet fallen by the wayside, leaving the market on defensive footing heading into tomorrow's release of the January CPI (Briefing.com consensus 0.3%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) readings.

U.S. Treasuries had a strong showing on Thursday with some help from weakness in equities and an impressive 30-year bond auction. The 2-year note yield settled down four basis points to 3.47%, and the 10-year note yield settled down seven basis points to 4.17%.

• S&P Mid Cap 400: +6.9% YTD
• Russell 2000: +5.4% YTD
• DJIA: +2.9% YTD
• S&P 500: -0.2% YTD
• Nasdaq Composite: -2.8% YTD

Reviewing today's data:

• Weekly Initial Claims 227K (Briefing.com consensus 230K); Prior was revised to 232K from 231K, Weekly Continuing Claims 1.862 mln; Prior was revised to 1.841 mln from 1.844 mln
  • The key takeaway from the report is its steady messaging that layoff activity is low and that hiring activity is slow.
• January Existing Home Sales 3.91 mln (Briefing.com consensus 4.21 mln); Prior was revised to 4.27 mln from 4.35 mln
  • The key takeaway from the report is that the existing home market remains supply constrained. That is pushing up prices and mitigating some of the affordability benefits linked to wage growth and lower mortgage rates.