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Wall Street opened mixed on Wednesday as investors grappled with the aftermath of a devastating technology sell-off that erased billions in market value, while the US Treasury maintained steady auction policies amid growing fiscal concerns.
Tech Sector Under Siege
The Nasdaq Composite extended its decline, falling 0.4% to 25,145 after Tuesday’s brutal 1.55% drop. In contrast, the S&P 500 and Dow Jones Industrial Average managed modest gains of 0.06% and 0.57% respectively as investors sought refuge in non-tech sectors.
Advanced Micro Devices led the carnage with a 9% plunge after delivering a disappointing first-quarter forecast that dampened semiconductor sentiment. Chipotle Mexican Grill tumbled nearly 6% following its fourth consecutive quarter of declining customer traffic and projections of flat same-store sales growth for 2026.
The broader software sector faced intense pressure after Anthropic announced a new artificial intelligence tool capable of automating tasks across legal, sales, marketing and data analysis functions. This development sparked fears about AI’s potential to disrupt traditional software companies, triggering widespread selling in ServiceNow and Salesforce shares.
AI Disruption Reshapes Market Dynamics
Earnings data revealed the software sector’s struggles, with only 71% of S&P 500 software companies beating revenue expectations this season, significantly trailing the overall technology sector’s 85% beat rate. The pressure extended to “Magnificent Seven” giants Microsoft and Meta Platforms, both closing with sharp losses as concerns about AI disruption drove sector rotation toward cyclical stocks.
Walmart emerged as a major beneficiary of this rotation, surging 3% on Tuesday to push its market capitalization past the $1 trillion milestone. The retail giant’s achievement highlighted how investors are repositioning away from technology exposure.
Anthropic’s competitive advantage stems from its ability to build proprietary AI models customized for specific industry needs. This positions the company uniquely in the AI ecosystem, potentially threatening both traditional legal data services and AI startups like Harvey AI, valued at $5 billion, and Legora, valued at $1.8 billion.
Treasury Stability Amid Market Turbulence
The US Treasury announced it will maintain current auction sizes for bonds and notes across multiple quarters, meeting market expectations. However, Treasury Borrowing Advisory Committee minutes revealed dealer estimates pointing to a substantial $1.1 trillion shortfall for 2027-2028, suggesting auction size increases might occur sooner than anticipated, potentially by late 2026.
Critical Earnings Ahead
Investors now await crucial earnings reports from technology heavyweights, with Alphabet scheduled to announce results Wednesday and Amazon set to report Thursday. These results could determine whether the tech sell-off represents a temporary correction or signals deeper structural challenges facing the sector amid AI disruption concerns.
Sources: Koreatimes, Economic Times, Mint
