The US stock market opened Wednesday’s session on 4 February mixed, as investors looked for direction following a tech rout on Tuesday that wiped out billions of investors’ wealth on Wall Street.
After a 1.55% decline in the previous session, the tech-heavy Nasdaq Composite fell 0.4% to 25,145 level, while the S&P 500 and the Dow Jones Industrial Average began the session with gains of over 0.06% and 0.57%, respectively.
Among individual stocks, Advanced Micro Devices dropped 9% after its first quarter forecast dampened market sentiment, while Chipotle shares were also under pressure, falling nearly 6% after the restaurant chain reported declining traffic for the fourth straight quarter and projected flat same-store sales growth for 2026.
There was widespread selling in software stocks such as ServiceNow and Salesforce in the previous session following an announcement by Anthropic that it was launching a new artificial intelligence tool enabling automated tasks across legal, sales, marketing and data analysis, raising concerns about the potential impact on software firms.
There are also signs that software companies are lagging their technology-sector peers. So far this earnings season, just 71% of software companies in the S&P 500 have beaten revenue expectations, according to data compiled by Bloomberg. This compares with 85% for the overall tech sector.
The pressure also spilled over to other technology stocks, including “Magnificent Seven” members such as Microsoft and Meta Platforms, which closed with sharp losses.
In addition, fears over AI disrupting the software industry have driven sector rotation toward cyclical stocks, further adding to the pressure on technology shares.
Meanwhile, the rotation out of the technology space benefited some counters, including retail giant Walmart, which closed Tuesday’s session 3% higher, pushing the company’s market capitalisation past the $1-trillion mark.
Anthropic new AI automations tool
Anthropic is part of a growing wave of AI startups developing tools for the legal industry. Long before Anthropic’s plugin launch, startups such as Legora and Harvey AI had already been flooding the legal sector with products they claim can save lawyers from routine, time-consuming work, Bloomberg reported.
Investors have been pouring money into AI products for the legal industry for more than two years. Harvey AI was valued at $5 billion in June, while Legora raised funds at a $1.8 billion valuation in October.
Anthropic, however, stands apart in that it builds its own AI models that can be customised for an industry’s specific needs. Its position in the AI ecosystem as a major model developer gives it a unique advantage, allowing it to potentially disrupt both traditional legal news and data services as well as legal AI startups. Firms such as Legora rely on underlying models from developers like Anthropic, the report noted.
Key earnings in focus
Earnings from major technology companies will also be in focus, with Alphabet scheduled to report its results later in the day, while Amazon is set to announce its earnings on Thursday.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
