Tech drags down stocks as Anthropic’s AI tool threatens software companies
Every Mag 7 stock except for Tesla fell as investors rotated out of tech and into a more defensive posture.
The S&P 500 and Nasdaq 100 sank as Anthropic’s new tools for Cowork, a computer assistant on mental steroids, triggered a sell-off in software stocks. The Russell 2000 gained.
Of the BATMMAAN stocks, only Tesla gained, and tech was the worst-performing sector. Energy was the best-performing sector as crude oil prices climbed amid escalating tensions with Iran. Investors switched to a defensive stance, sending consumer staples and utilities up over 1%, along with materials. Gold and silver prices rebounded after their recent historic wipeout. Bitcoin resumed its rout.
Stocks that moved higher:
Opendoor Technologies jumped on the news that US developers are pursuing a “Trump Homes” plan and on mortgage loan growth commentary from Rocket Companies, whose shares also spiked.
Palantir surged as analysts gushed over yesterday’s Q4 earnings.
Western Digital rose as management announced an additional $4 billion in share buybacks. Additionally, another 7.5 million shares of its old flash drive business — which became Wall Street’s hottest stock — will soon hit the market, a big boon for its balance sheet.
Gold mining companies Anglogold Ashanti and Newmont bounced as gold rebounded.
Merck rose after reporting better-than-expected Q4 results, though full-year guidance missed expectations.
Walmart rose, officially hitting a $1 trillion market cap as its e-commerce business boomed.
Teradyne, which mainly makes equipment that tests advanced systems like semiconductors, soared after a blowout revenue and earnings beat with strong guidance to match.
Shares of JetBlue took off following an upgrade and price target hike from Citi.
Stocks that moved lower:
The recently released Claude Cowork plug-ins hit software companies Salesforce, DocuSign, Atlassian, Adobe, Workday, and ServiceNow especially hard.
Anthropic’s legal plug-ins for Claude Cowork also prompted a rush out of legal software and publishing stocks, including RELX, Thomson Reuters, and Legalzoom.com.
Novo Nordisk plummeted as the pharmaceutical giant expects sales to decline by up to 13% in 2026 amid “intensifying competition.”
Pfizer tumbled after the company’s management reaffirmed 2026 earnings guidance coming in short of Wall Street’s expectations.
Nvidia slumped to fresh lows after CEO Jensen Huang affirmed the company’s plans to invest in OpenAI.
Major after-hours block trades yesterday appeared to drive negative momentum in Spotify today.
In a reversal of yesterday’s rebound, gaming stocks Nintendo, Unity Software, Take-Two Interactive, and Roblox resumed falling as investors weighed the potential impact of Google’s Project Genie.
PayPal cratered after the digital payments company posted weaker-than-expected Q4 results and 2026 profit guidance, alongside a surprise leadership change.
Rambus sank after a Q4 earnings miss and soft outlook weighed on investor sentiment.
