More Drops for Technology Stocks Weigh on Wall Street

Wall Street’s major indexes struggled as renewed weakness in technology stocks dragged the market lower, with the S&P 500 and Nasdaq pressured by sharp losses in semiconductor, software and AI‑linked companies.

By Aisha Patel – Global Affairs Correspondent

Last Updated: Feb. 2, 2026

Tech Shares Drag Major Indexes

Technology stocks continued to slide, exerting downward pressure on Wall Street’s headline indexes. The S&P 500 fell about 0.5%, marking its fifth modest decline in six trading days, while the tech‑heavy Nasdaq Composite slid roughly 1.5% as major tech names struggled. Chipmaker Advanced Micro Devices saw a steep drop of more than 17%, even after reporting solid quarterly earnings, as investors reacted to concerns about growth prospects and intense competition in the semiconductor industry. This broad weakness in tech shares underscored lingering unease around stretched valuations and the future trajectory of high‑growth companies. :contentReference[oaicite:2]{index=2}

AI‑Driven Concerns Amplify Sell‑Off

The market’s tech slump was fueled in part by renewed anxiety over artificial intelligence advancements and how they might reshape software and technology business models. Investors have grown wary that rapid innovation in AI could disrupt traditional revenue streams, leading to valuation adjustments for long‑dominant tech firms. Major software names such as Snowflake and Datadog have faced noticeable sell‑offs in recent sessions, contributing to broader sector weakness. This sentiment has weighed on traders’ appetite for risk assets, especially growth‑oriented tech stocks. :contentReference[oaicite:3]{index=3}

Mixed Market Breadth Amid Sell‑Off

Despite the persistent declines in technology stocks, market breadth showed a mixed picture. While tech laggards led the declines, other parts of the market — such as parts of the industrial and consumer goods sectors — saw relative resilience. The Dow Jones Industrial Average even posted a gain as strength in non‑tech sectors helped offset some of the weakness. However, the overall mood remained cautious as investors continued rotating away from high‑valuation tech assets toward more defensive and value‑oriented segments of the market. :contentReference[oaicite:4]{index=4}

Global Ripple Effects and Asian Markets

The technology sell‑off on Wall Street has rippled through global markets, contributing to declines overseas. Asian equity benchmarks saw pressure in response to the U.S. market’s weakness, with indexes like Tokyo’s Nikkei and South Korea’s Kospi reflecting broader risk‑off sentiment among international investors. This synchronized weakness highlights how interconnected global stock markets have become, particularly when major U.S. tech stocks influence sentiment and trading abroad. :contentReference[oaicite:5]{index=5}

Outlook: Caution Amid Earnings and Valuations

Looking ahead, market participants are watching upcoming earnings releases from major tech companies and broader economic signals for indications of whether the sell‑off will deepen or stabilize. Analysts note that stretched valuations continue to be a central concern, especially for technology and growth stocks that have seen significant gains in recent years. Continued volatility around AI sector performance and competitive pressures could keep investor sentiment fragile in the near term, potentially prolonging the current correction in tech shares. :contentReference[oaicite:6]{index=6}