Wall Street futures tumbled Friday morning as mounting worries about artificial intelligence technology continued to weigh heavily on tech companies, pushing the Nasdaq toward what could be its worst monthly decline since March 2025.
Investors are growing increasingly nervous about whether the enormous investments being poured into AI development will actually pay off, creating significant turbulence across technology sectors throughout February.
Adding to market uncertainty, trade policy questions emerged after the Supreme Court struck down most tariffs that President Donald Trump had implemented previously. Trump responded by announcing a temporary 10% worldwide tariff that took effect Tuesday.
Even chip giant Nvidia couldn’t escape the pessimism, with shares dropping slightly in early trading despite posting solid earnings results. The stock had tumbled more than 5% in Thursday’s session, highlighting how fragile investor confidence remains around AI investments.
“It’s easy to feel anxious when the tech darlings that carried the market stumble,” explained Brian Jacobsen, chief economic strategist at Annex Wealth Management.
“We are witnessing a true market rotation, where opportunities are broadening out beyond a handful of megacap tech stocks and flowing into value stocks, small-caps and industrial sectors,” Jacobsen added.
Several companies felt the AI anxiety acutely. Cloud security provider Zscaler plummeted 10.5% after reporting a larger quarterly loss, while financial software maker Intuit declined 3.1% following disappointing profit forecasts.
The broader software industry has been particularly vulnerable this year as investors worry about AI potentially disrupting established business models. Other sectors including financial services, data analytics, legal services, real estate, and transportation are also facing similar concerns.
Market indicators showed the strain, with the Nasdaq finishing below a key technical benchmark for 17 consecutive trading sessions. However, the Dow Jones Industrial Average remained positioned for its tenth straight month of positive performance.
By 7:31 a.m. Eastern Time, futures contracts showed significant declines across major indexes, with Dow futures down 294 points and S&P 500 futures falling 27.75 points.
Not all companies struggled in early trading. Netflix jumped 8.1% after announcing it would step back from competing for Warner Bros Discovery assets. Paramount Skydance surged 7.5% after securing valuable entertainment properties.
Block, the payments company, soared 20% following news of major workforce reductions affecting over 4,000 employees as part of an AI integration strategy. Dell also gained 12.1% after projecting doubled revenue from AI server business by fiscal 2027.
Language-learning platform Duolingo moved in the opposite direction, dropping 24.2% after providing disappointing booking forecasts for the coming quarters.
Investors are closely watching for January producer price data, which could provide clues about Federal Reserve interest rate decisions ahead.
