Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) are down by over 1% on Thursday as the tech rout shows no signs of easing.
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Following the release of an Anthropic Claude Cowork legal tool, tech stocks sold off indiscriminately amid elevated fears that AI could reduce the need for software services. During the past week, Microsoft (MSFT), ServiceNow (NOW), and Salesforce (CRM) have all fallen by at least 8%.
Labor Market Weakness Adds to Investor Anxiety
Labor market data released this morning has only contributed to the poor performance. U.S.-based employers announced 108,435 job cuts in January, the highest total for the month in 17 years and rising by 118% from December, according to Challenger, Gray & Christmas. Furthermore, employers announced just 5,306 planned hires during the month, also the lowest in 17 years.
Job openings are also becoming more scarce. The Job Openings and Labor Turnover Survey (JOLTS) released by the Bureau of Labor Statistics showed 6.542 million job openings in December, well below the estimate of 7.25 million and falling from 6.928 million in November.