U.S. Software Stocks Extend Selloff as AI Uncertainty Erases $1 Trillion in a Week

Published: February 6, 2026

AI Concerns Drive Prolonged Decline in Software Stocks

U.S. software and data services stocks fell for a seventh consecutive session as concerns grew that rapidly advancing artificial intelligence tools could disrupt existing business models across the industry.

The S&P 500 Software & Services Index declined 4.6%, wiping out approximately $1 trillion in market value since January 28.

Major Stocks Under Pressure

ServiceNow fell 7.6%, while Salesforce and Microsoft each dropped nearly 5%. Thomson Reuters shares slid 5.6% despite reporting quarterly earnings broadly in line with expectations and announcing a dividend increase.

“Short-term earnings resilience is often insufficient to rule out longer-term downside risks given uncertainty around AI’s ultimate impact,”
— Ben Snider, U.S. Equity Chief Strategist, GoldmanBSachsTechnical Levels and Sector Rotation

The index is trading about 21% below its 200-day moving average, the widest gap since June 2022. Meanwhile, capital is rotating from technology stocks into value-oriented sectors such as consumer goods, energy, and industrials.