Stock market today: S&P 500, Nasdaq sink as AI worries fuel return to tech sell-off ahead of Google earnings

A tech-driven selloff continued to weigh on markets in midday trading on Wednesday as Wall Street failed to find sturdy footing.

The tech-heavy Nasdaq Composite (^IXIC) led the way down on Wednesday, shedding roughly 2%, while the S&P 500 (^GSPC) lost around 0.9%. The blue chip-heavy Dow Jones Industrial Average (^DJI) had initially rallied to start the session, but sat at a gain of roughly 0.1% as of 1 p.m. ET.

The software sector managed to slow the bleed midday after an initial drop, with losses of 1% and 2%, respectively, at industry leaders Salesforce (CRM) and ServiceNow (NOW). SAP SE (SAP), whose weak earnings had been a key trigger of the sell-off, flipped to a gain of 0.1%.

Also weighing on markets on Wednesday were weaker-than-expected January jobs numbers. Private payrolls data provider ADP reported that private companies added 22,000 jobs in January, far below economists’ consensus estimates of 45,000 jobs and December’s add of 41,000 payrolls.

The US economy’s growth is likely to be front-loaded in 2026, Bank of America economist Aditya Bhave said in a client note Wednesday morning, even as consensus estimates see growth largely steady.

Consensus estimates predict that the US will grow at a steady pace this year, with estimates calling for growth each quarter between 2% and 2.2%. Instead, Bhave wrote, the economy’s increase is likely to be tilted toward the front half of the year.

First quarter and second quarter growth are likely to land at 2.6% and 3%, respectively, while third quarter and fourth quarter growth are likely to both land at 2%, Bhave said.

“Consensus forecasts are not accounting for significant tailwinds to 1H 2026 GDP growth,” Bhave wrote. He highlighted the consumer stimulus coming from the One Big Beautiful Act and last year’s government shutdown, which he said is likely to boost first quarter growth by 0.5% to 1%.

Reuters has a good rundown of the state of play in the software sector:

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During the fourth quarter earnings call for power management giant Eaton Corporation (ETN), CEO Paulo Ruiz Sternadt said the company’s backlog of orders “just keeps growing” and projected a continued firehose of demand as the AI arms race powers on.

Data center orders at Eaton roughly tripled in the fourth quarter over the prior year, while the backlog for its “Electrical Americas” division grew by 31% year-on-year to hit a new record, Sternadt said during the call on Tuesday.

Eaton’s stock price spiked after the report and is up by more than 6% over the past five trading sessions and by more than 16% on the year.

Eaton reported fourth quarter revenue at $7.05 billion, outperforming revenue of $6.24 billion from a year ago but falling below analysts’ expectations of $7.09 billion.

On the bottom line, the company reported adjusted earnings per share of $3.33 per share, outperforming estimates of $3.32 per share.

Talking about Eaton’s strong order backlog, Sternadt attributed much of the company’s success to the demand from AI hyperscalers.

“You probably noticed on recent news from the hyperscalers that they reconfirmed their capex plans for 2026 — this is also great news that supports these projects,” Sternadt said. “Multi-tenant and new cloud players, they are so active, never seen them so active as they are today. If I’m to summarize the market picture here, lots of strength, and these projects will take years to complete. So that’s what gives us the optimism in the future.”

Eli Lilly (LLY) stock rose as much as 7% early Wednesday after the pharmaceutical giant rolled out a strong sales outlook, touting the strength of its weight loss portfolio and pressuring shares of Danish drugmaker Novo Nordisk (NVO) for a second-straight day.

On Tuesday, Novo Nordisk said it expects a 5% to 13% drop in sales on 2026 due to increasing competition and regulation. Since the start of February, Novo Nordisk has lost roughly $50 billion in market cap as investors have fled the stock.

With Wednesday’s surge, Eli Lilly’s market cap is now north of $950 billion as it looks to retake the $1 trillion market cap threshold it briefly cleared earlier this year.

Eli Lilly reported Wednesday morning that it expects 2026 revenue to grow sharply, with sales rising between 20%-25% at the midpoint of its estimates. The company is forecasting revenues of $80 billion-$83 billion compared to 2025 revenue of $65.2 billion.

“We reached millions more patients—launching Inluriyo, expanding Mounjaro and Kisunla globally, and submitting orforglipron for approvalm,” Eli Lilly CEO David Ricks said in the company’s fourth-quarter earnings release. “We expanded our manufacturing capacity, and through our U.S. government agreement, opened new access to obesity medicines.”

The software sector has been shaken by a brutal sell-off over the last few days as a chorus of investor fears has grown over AI-driven disruption and displacement across the industry. Major names such as SAP SE (SAP), Salesforce (CRM), and ServiceNow (NOW) have each seen their stock prices fall more than 15% over the past five trading sessions.

Yahoo Finance’s Brian Sozzi says the sell-off has more room to run. He writes:

Read more here.

US stocks opened on wobbly ground to start Wednesday’s trading session as the market looked to steady after a tech-led slide amid a fresh wave of earnings, while investors waited for Alphabet (GOOG, GOOGL) results to reveal the company’s AI mojo.

The blue-chip Dow Jones Industrial Average (^DJI) rose on Wednesday morning, picking up roughly 0.5%. The S&P 500 (^GSPC) hovered just above the flat line after swinging between small gains and losses, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower after tech stocks bore the brunt of the selling on Tuesday.

Wednesday’s spotlight for Wall Street and Main Street alike will focus on earnings from Alphabet (GOOG) and Arm Holdings (ARM) results on Wednesday, with investors look for any signs of growing or shrinking AI demand. Those results will be followed by Amazon’s (AMZN) quarterly release on Thursday.

Elsewhere in the market, gold (GC=F) continued to regain ground, rising above $5,000 an ounce on tensions between Washington and Tehran, while Bitcoin (BTC-USD) continued its plunge, crossing below $75,000.

In the labor market, employers added just 22,000 jobs in January, according to data released Wednesday morning from ADP, well below consensus estimates of 45,000. Friday’s planned federal jobs report has been indefinitely delayed by the partial government shutdown that ended Tuesday.

US private employers added 22,000 jobs in January, according to data released by ADP, falling far below analyst estimates of 45,000 jobs added.

The reading on private payrolls, released Wednesday morning by ADP, fell short of all economist estimates compiled by Bloomberg, a potential sign of a still-cooling labor market. January’s additions also fell short of December’s additions of 41,000.

US economists at Deutsche Bank noted in a report Wednesday morning that January “tends to be the largest net job loss month as seasonal hiring ahead of the holidays unwinds.”

The healthcare sector was a standout for January job growth, ADP said, adding 74,000 jobs, while manufacturing continued its slowdown, shedding private payrolls every month since March 2024.

“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024,” ADP chief economist Nela Richardson said in a statement. “While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.”

Under normal circumstances, the market would have gotten a wider reading on the state of the labor market in the federal government’s usual jobs report on Friday. However, the BLS has said that the report’s release will be delayed due to the partial government shutdown, which ended on Tuesday.

That means that the week’s private data releases — from ADP on Wednesday and from the job outplacement firm Challenger, Gray & Christmas with layoffs announcements on Thursday — will take on increased importance as investors search for a read on labor.

Read more here.

Silicon Laboratories’ (SLAB) stock soared 52% before the bell on Wednesday after Texas Instruments (TXN) announced it would be buying the chip designer in a deal worth $7.5 billion.

The deal will allow Texas Instruments to expand its business into wireless connectivity chips.

Reuters reports:

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Eli Lilly (LLY) stock jumped 7% before the bell on Wednesday after the pharmaceutical group provided a 2026 profit forecast above Wall Street estimates. The company said it hopes demand for its weight-loss drugs rises as it prepares to release its oral weight-loss pill this year.

Reuters reports:

Read more here.

Supermicro (SMCI) stock jumped 11% before the bell on Wednesday after the server maker raised its annual revenue forecast on Tuesday, citing continued strong demand for its AI servers driven by companies expanding their data center capacity.

Reuters reports:

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Enphase Energy (ENPH) stock soared 20% during premarket hours after the company’s profit and revenue beat analysts’ estimates. The technology company’s shares have risen 10% over the past month, but are down almost 42% for the year.

The AP reports:

Read more here.