U.S. stocks extended their selloff on Thursday, with the S&P 500 falling for a third straight session, sliding 1.2% and officially turning negative for the year. Mounting concerns around artificial intelligence, economic momentum, and labor-market softness pushed investors further into risk-off mode.
The Dow Jones Industrial Average dropped 1.2%, while the Nasdaq Composite led losses with a 1.6% decline, reflecting renewed pressure on technology stocks.
AI Anxiety Spreads Beyond Tech
The selloff began earlier in the week as technology stocks came under pressure, driven by fears that rapid advances in AI could disrupt large portions of the software industry, rather than simply boost productivity.
By Thursday, those concerns had spread well beyond tech, weighing on most sectors across the market.
Flight to Safety Takes Hold
Only consumer staples and utilities finished the day in positive territory, underscoring a clear shift toward defensive positioning. Investors moved away from growth-sensitive and cyclical sectors, seeking shelter in traditionally safer assets.
The risk-off mood also hit cryptocurrencies:
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Bitcoin fell to a 15-month low, dropping about 14% to just above $63,000
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Ethereum also declined roughly 14%
Weak Labor Signals Add to the Gloom
Job
Economic data further dampened sentiment. Challenger, Gray & Christmas reported that U.S. employers announced 108,435 job cuts in January, up 118% year over year and the highest January total since 2009.
Meanwhile, initial jobless claims came in above expectations, raising concerns about labor-market cooling.
Market Snapshot
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Dow Jones Industrial Average: -1.20%
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$S&P 500(.SPX)$ : -1.23%
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$NASDAQ(.IXIC)$ : -1.59%
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Hot stock: $McKesson(MCK)$ (+16.5%)
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Biggest loser: $Estee Lauder(EL)$ (-19.2%)
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Best sector: Consumer Staples (+0.3%)
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Worst sector: Materials (-2.8%)
Retail Earnings Offer a Bright Spot
Despite the broader selloff, early retail earnings painted a surprisingly resilient picture of consumer demand. Companies including $Amazon.com(AMZN)$ , Tapestry, Ralph Lauren, and e.l.f. Beauty all reported solid revenue growth, with Coach sales up 25% year over year and e.l.f. revenue surging 38%.
Executives consistently said demand has not softened in early 2026, suggesting consumer spending remains a stabilizing force, even as markets grow more cautious.
What to Watch Next
Friday brings earnings from Biogen, Cboe Global Markets, Centene, and $Philip Morris(PM)$ , alongside the University of Michigan’s Consumer Sentiment Survey, which could provide further clues about the health of the U.S. economy…
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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