Stocks Hit by AI-Disruption Fears as IBM Tumbles: Markets Wrap
(Bloomberg) — Stocks fell and bonds rose as renewed anxiety over the impact of artificial intelligence on company profits joined lingering tariff uncertainty in squelching risk appetites. Bitcoin dropped below $65,000. Gold rallied.
The S&P 500 slid 1%. Tech, delivery and payment shares got hit as Citrini Research laid out the potential AI risks to various industries. DoorDash Inc. and American Express Co. sank over 6.5%. An ETF focused on software firms lost 4.8%. International Business Machines Corp. tumbled 13% in its worst day since October 2000 as Anthropic said its Claude Code can help modernize COBOL, a programming language mainly run on IBM computers.
“The software selloff is a reminder of what can happen when momentum-driven sectors shift into reverse,” said Steve Sosnick at Interactive Brokers. “The broader, more important question is: How many sectors can go into reverse before they drag the broader market along with them?”
Rising anxiety over the impact of AI disruption is prompting traders to dump shares of any company seen at the slightest risk of being displaced. Those worries have also grown despite solid results from megacaps amid doubts over whether big investments in the technology will pay off soon.
Investors also parsed the implications of trade developments. After the Supreme Court’s decision Friday to nix President Donald Trump’s “reciprocal” tariffs, the White House announced plans to replace the prior levies with a new, across-the-board 15% tariff on US imports.
“The push and pull with tariffs is likely to be a distracting theme for markets for the remainder of the year, albeit with less volatility than the initial shock last April,” said Michael Landsberg at Landsberg Bennett Private Wealth Management.
As caution prevailed, haven currencies outperformed while gold topped $5,200. A rally in Treasuries sent 10-year yields down five basis points to 4.03%.
Key events this week include Trump’s State of the Union address tomorrow, Nvidia Corp.’s results Wednesday and a Friday reading on producer prices. Federal Reserve Governor Christopher Waller said his March rate call will hinge on jobs data.
“Given the various economic risks and uncertainties that can be linked to the tariff drama, we expect the Fed’s wait-and-see approach to be reinforced,” said Ian Lyngen at BMO Capital Markets.
At Edward Jones, Angelo Kourkafas said the newly announced 15% tariff rate is unlikely to have a meaningful impact on economic activity.
“We advise investors not to overreact to headlines, and we reiterate our constructive outlook for global equity markets, supported by strong corporate profit growth and healthy economic activity,” he added.
With the tech sector lagging amid concerns about AI disruption, he says a balance between growth- and value-style sectors will be key to investor success this year.
“We recommend overweight positions in industrials, health care, and consumer discretionary, offset by underweights in consumer staples and utilities,” Kourkafas noted.
Corporate Highlights:
Anthropic PBC Chief Executive Officer Dario Amodei will meet with US Defense Secretary Pete Hegseth on Tuesday, according to a senior Pentagon official, as contract talks with the artificial intelligence startup remain deadlocked over the company’s insistence on guardrails for use of its technology. Anthropic said three leading artificial intelligence developers in China worked to “illicitly extract” results from its AI models to bolster the capabilities of rival products. PayPal Holdings Inc. is attracting takeover interest from potential buyers after a stock slide wiped out almost half of its value, according to people familiar with the matter. Abbott Laboratories sold $20 billion of bonds to help fund its acquisition of cancer-screening company Exact Sciences Corp. Gilead Sciences Inc. agreed to buy US cancer-focused biotech Arcellx Inc. for as much as $7.8 billion as it seeks to boost its drug pipeline. Merck & Co. is splitting its main pharmaceutical unit in two in an effort to better highlight the parts of the business that are growing, as it stares down a patent cliff for its best-selling cancer drug Keytruda. Novo Nordisk A/S’s next-generation weight-loss drug CagriSema isn’t even on the market yet, but the company’s chief executive officer is already batting back suggestions that the drug is obsolete following the release of disappointing trial results. Domino’s Pizza Inc. reported a larger-than-expected rise in comparable sales, as consumers were drawn to the pizza chain’s budget-friendly pies. Chevron Corp. emerged as the front-runner to take control of Iraq’s second-largest oil complex from Russian producer Lukoil PJSC after signing a deal to engage in exclusive talks over the giant field. Some of the main moves in markets:
Stocks
The S&P 500 fell 1% as of 4 p.m. New York time The Nasdaq 100 fell 1.2% The Dow Jones Industrial Average fell 1.7% The MSCI World Index fell 0.8% Bloomberg Magnificent 7 Total Return Index fell 1.5% The Russell 2000 Index fell 1.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1792 The British pound rose 0.1% to $1.3495 The Japanese yen rose 0.2% to 154.69 per dollar Cryptocurrencies
Bitcoin fell 4.4% to $64,630.25 Ether fell 4.3% to $1,866.38 Bonds
The yield on 10-year Treasuries declined five basis points to 4.03% Germany’s 10-year yield declined three basis points to 2.71% Britain’s 10-year yield declined four basis points to 4.31% Commodities
West Texas Intermediate crude was little changed Spot gold rose 2.5% to $5,234.10 an ounce ©2026 Bloomberg L.P.
