S&P 500 Trims Gains as Software Worries Offset Strong Jobs Data

MarketsGiftExpandTraders work on the floor at the New York Stock Exchange.Photographer: Michael Nagle/BloombergGiftGift this articleAdd us on GoogleContact us:Provide news feedback or report an errorConfidential tip?Send a tip to our reportersSite feedback:Take our SurveyNew WindowGiftBy Joel LeonFebruary 11, 2026 at 8:27 PM GMT+5:30Updated on February 12, 2026 at 2:55 AM GMT+5:30BookmarkSaveTranslateListen4:23US stocks pared an early advance on Wednesday as worries around the impact of artificial intelligence on several industries curtailed a rally fueled by strong employment data.The S&P 500 Index finished the session little changed, albeit with a slight decline, erasing gains that at one point put the benchmark on track for a fresh all-time closing high. The technology-heavy Nasdaq 100 Index advanced 0.3% after gaining as much as 1%, and the Cboe Volatility Index hovered at around 18.“The bounce following the payroll report was a bit surprising, as the Fed has recently been a bigger focus than the economy,” said Mark Hackett, chief strategist at Nationwide. “The selloff has been driven by the technology space, which follows the pattern from the last several months, with international and value taking the lead.”Bloomberg’s gauge for the Magnificent Seven was down 0.6%, while an exchange-traded fund tracking software names dropped 2.6%.Software stocks have been pressured for over a week amid concerns over disruption from artificial intelligence. As a result, investors have sought companies with businesses that are hard to replace with the technology.Real estate services stocks fell on Wednesday as investors assessing the vulnerability of companies to disruption from artificial intelligence. CBRE Group Inc. slumped 12%, while Jones Lang LaSalle Inc. and Cushman & Wakefield Ltd. also declined.The group is the latest to get caught up in what Keefe, Bruyette & Woods analyst Jade Rahmani called the “AI scare trade,” after investors dumped shares in software, private credit companies, wealth managers and insurance brokers in the span of just over a week.The attention for traders now turns to the consumer price index, which will be released on Friday. Should core CPI come close to or below estimates, JPMorgan’s trading desk has placed a 70% probabilityBloomberg Terminal on the S&P 500 rising.Good News Is Bad NewsGrowth and momentum stocks are “taking the most heat on the prospect of interest rates staying higher for longer,” said Louis Navellier, chief investment officer at Navellier & Associates. “We have another case where good news, a stronger job market, becomes bad news by holding yields higher,” he added.Stocks had initially received a boost from stronger-than-expected employment data. Payrolls rose in January by the most in more than a year, while the unemployment rate unexpectedly fell, according to data from the Bureau of Labor Statistics. Employers added 130,000 jobs last month and the unemployment rate declined to 4.3%.After a year marked by rising unemployment and minimal hiring, the data — which was originally scheduled for Feb. 6 but was delayed by the partial government shutdown — suggests the labor market is finding its footing.Following the jobs print, traders leaned toward the year’s first interest-rate cut happening in JulyBloomberg Terminal. Traders had seen June as a possibility, and ramped up bets for April after retail sales disappointed.Quilter’s Lindsay James sees it likely that the Federal Reserve will hold rates at the current level. In turn, Fed Chair nominee Kevin Warsh will likely be under pressure from the Trump administration to cut rates.Investors currently view the US as a “kaleidoscope of contrasting and clashing elements,” James said. On one hand “economic growth has been revised up by many economists,” while on the other there are signs of strain in household finances and consumer staples companies have warned shoppers on lower incomes are cutting back.“Furthermore, with significant downward revisions to 2025 figures, investors may be wary to extrapolate one month of data,” James added.Among the biggest software decliners were Unity Software Inc., which plunged 26% after giving a weaker-than-expected outlook. Snap Inc., Palantir Technologies Inc. and Microsoft Corp. also dropped.Meanwhile, Mattel Inc. slumped 25% in the toymaker’s worst day since 1999Bloomberg Terminal after its earnings per share forecast missed estimates.

Robinhood Markets Inc. dropped 8.9% as the fintech firm reported lower fourth-quarter profit, which were weighed on by sharp declines in Bitcoin and other cryptocurrencies. Moderna Inc. tumbled 3.5% as US regulators refused to review its novel mRNA flu vaccine. Elsewhere, Lattice Semiconductor Corp. jumped 16% after giving a stronger-than-expected revenue forecast.

Smurfit Westrock Plc rose 9.9% as the company unveiled an outlook showing an end to the industry’s years-long downturnBloomberg Terminal.