The Decline Driven by AI Fears and Employment Concerns: What's Next?

On U.S. trading on February 5 (early morning February 6 in Korea), Wall Street plummeted amid a tech-led sell-off. The Dow Jones Industrial Average fell about 1.2% to 48,908.72, the S&P 500 dropped 1.2% to 6,798.40, and the Nasdaq slid 1.6% to 22,540.59, marking a third straight day of losses.

Investors reacted sharply to 231,000 new weekly unemployment claims—higher than forecast—and 108,000 announced corporate layoffs in January, the largest monthly total since the financial crisis. Heightening risk aversion further was the delay of the January jobs report (nonfarm payrolls) due to a partial federal government shutdown, removing a key data point for gauging the Federal Reserve’s future rate path.

On the corporate earnings front, Alphabet shares weakened after the company said its 2026 capital expenditures would nearly double those of 2025. Amazon shares fell over 4% in regular trading and slid further in after-hours, as its large-scale AI and robotics investment plan failed to offset earnings shortfalls. Other big tech names—including Microsoft and Qualcomm—as well as semiconductor and software stocks joined the sell-off, amplifying the Nasdaq’s decline.

Global asset markets likewise came under pressure. Bitcoin tumbled roughly 25% from its weekly high to around $62,000, while gold and silver—each fresh off record highs—fell more than 2%, and WTI crude oil declined about 3%. The U.S. 10-year Treasury yield eased from 4.28% to 4.20%, reflecting mounting growth concerns. Investors are now eyeing upcoming Fed official remarks and the rescheduled jobs data release as potential catalysts for renewed volatility.