KEY POINT
- US labor market softens: December job openings fell to the lowest level since 2020, while planned corporate layoffs hit their highest January total since 2009.
- Technology sector under pressure: Shares of Alphabet and Qualcomm declined, reflecting investor caution around AI spending and chip demand.
- Risk assets retreat: Bitcoin fell below $70,000, and silver extended a recent decline, highlighting growing risk aversion.
NEW YORK — US stock markets fell sharply Thursday as weak employment indicators and losses in major technology stocks unnerved investors. The Nasdaq Composite led the decline, posting its worst two day slide since last year’s tariff disruptions.
The S&P 500 and Dow Jones Industrial Average each dropped about 1 percent. Investors cited unexpectedly low job openings and rising layoffs, alongside disappointing guidance from several large tech firms, as key factors driving market weakness.
Stock markets opened lower Thursday as investors digested new employment data and corporate forecasts. The tech heavy Nasdaq suffered the largest drop, reflecting heavy losses in mega cap growth stocks, particularly those linked to artificial intelligence investments. The decline signals heightened market sensitivity to labor conditions and corporate spending plans.
Data from the US Labor Department showed that job openings in December fell to about 6.5 million, marking the fewest since 2020.
Meanwhile, new claims for unemployment insurance increased more than expected, hinting at potential softening in the labor market.
The outplacement firm Challenger, Gray & Christmas reported 108,435 planned layoffs in January the highest January figure since 2009 and significantly above the previous year.
Hiring intentions also fell, underscoring cautious corporate sentiment as firms reassess growth plans in a shifting economic environment.
Market Reaction and Sector Performance
The S&P 500 and Dow Jones each declined roughly 1 percent, while the Nasdaq’s losses were steeper due to concentrated selling in technology shares.
Alphabet Inc. shares fell after the company announced up to $185 billion in planned AI-related capital investments this year, raising concerns about spending levels and return on investment.
Qualcomm Inc. also dropped after reporting a weaker than expected forecast, reflecting uncertainty about semiconductor demand. Investors awaited earnings from Amazon.com Inc., which could influence tech market sentiment further.
Dr. Alicia Munnell, director of the Center for Retirement Research at Boston College, said, “The labor market is showing signs of strain. Fewer job openings combined with rising layoffs suggest companies are adjusting to slower growth.”
Mohamed El Erian, chief economic adviser at Allianz, noted, “The surge in planned layoffs points to structural shifts in the economy. Investors are rightly factoring in how technological changes and corporate strategies could reshape labor demand.”
US Labor Market and Market Movements — Recent vs Prior
| Indicator | Latest (Jan/Feb 2026) | Prior (Dec 2025) | Trend |
|---|---|---|---|
| Job Openings | ~6.5 Million | ~6.9 Million | Decreasing |
| Planned Layoffs | 108,435 | 35,553 | Sharp Increase (205% up) |
| Hiring Intentions | 5,306 (Lowest since 2009) | ~10,400 | Declining |
| Nasdaq Performance | -1.5% (Tech-led slide) | -1.2% | Weakening |
| ADP Private Jobs | 22,000 | 37,000 | Slowing Down |
Janet Lin, portfolio manager at Greylock Capital in New York, said, “Investors are reassessing risk, particularly in tech, as labor data and AI spending plans are digested.”
Carlos Reyes, an independent trader in Miami, added, “The pullback in Bitcoin and silver reflects broader risk-off sentiment. Traders are prioritizing stability over high risk assets.”
Investors are closely monitoring upcoming earnings reports and economic releases, including February jobs data. The Federal Reserve may adjust policy based on evolving labor market and inflation conditions.
Market participants are expected to remain cautious as companies manage labor costs and capital expenditures amid uncertainty in growth and technology demand.
Thursday’s declines illustrate the interconnected impact of labor market trends and technology sector performance on US equity markets.
While the S&P 500 and Dow saw moderate losses, the Nasdaq’s sharp drop underscores investor sensitivity to corporate spending and employment data. Analysts emphasize that ongoing corporate and economic indicators will be pivotal for market direction in the coming weeks..”
