A sharp selloff in the US stock market stunned investors as nearly $700 billion in market value was erased within minutes. Major Wall Street indices — the Dow Jones, S&P 500, and Nasdaq — came under heavy pressure simultaneously.
The decline was driven by multiple factors working at once:
- Rising concerns around Artificial Intelligence (AI)
- Heavy selling in software and technology stocks
- Growing fears of higher unemployment
- Fresh tariff warning from Donald Trump
- Increasing uncertainty around global trade
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IBM Takes the Hardest Hit
IBM shares plunge 13% after AI disruption concerns
The biggest blow was seen in IBM, whose shares tumbled nearly 13%, marking one of the steepest single-day drops since October 2000.
The trigger was a blog post from AI firm Anthropic, claiming that its AI tool “Claude Code” can automate analysis related to COBOL modernization — a key business segment for IBM. Since a significant portion of global ATM transactions still rely on COBOL-based systems, investors grew concerned that AI could disrupt IBM’s traditional revenue streams.
Broader Tech Sector Under Pressure
Shares of:
- Microsoft
- Salesforce
- Adobe
fell between 3% and 5%.
Cybersecurity firms were not spared either:
- CrowdStrike
- Palo Alto Networks
These stocks declined between 3% and 10%, reflecting broader anxiety about AI-driven disruption and sector risks.
Why Are Unemployment Fears Rising?
According to a report by Citrini Research, the AI boom could push US unemployment to 10% by 2028. The possibility of job displacement weighed on consumer-focused stocks.
- American Express
- Mastercard
Both declined up to 7%, as investors feared reduced consumer spending if employment weakens.
Tariff Tensions Add to Market Anxiety
Donald Trump warned that countries attempting to “game” the US would face higher tariffs. The remarks heightened concerns over global trade stability.
Meanwhile, FedEx initiated legal action regarding tariff refunds, further deepening uncertainty in trade-related sectors.
Flight to Safer Assets
The turmoil extended beyond equities:
- US Dollar Index remained below 98
- Gold prices surged
- Silver strengthened
- Brent crude held above $71 per barrel
These moves suggest investors are shifting toward safer investment options amid rising volatility.
What’s Next for Markets?
Investors will now closely watch:
- Trump’s State of the Union address
- February consumer confidence data
- Statements from Federal Reserve officials
The $700 billion wipeout underscores how sensitive markets currently are to AI disruption, trade tensions, and economic slowdown signals. Until there is greater clarity on these fronts, volatility on Wall Street may persist.
