AI Fear Grips Wall Street as New Stock Market Reality Sets In

Investors dump stocks across software, financial services and asset management sectors amid concerns over AI disruption

Feb. 9, 2026 at 9:47am

Got story updates? Submit your updates here. ›

Investors have been growing increasingly anxious about how artificial intelligence will potentially transform the economy, and those concerns suddenly spilled over into the stock market last week. The culprit was AI startup Anthropic, which released new tools designed to automate work tasks in various industries, sparking fears that the innovations would doom countless businesses. In response, investors dumped a broad range of stocks, from Expedia Group Inc. to Salesforce Inc. to London Stock Exchange Group Plc, resulting in a $611 billion drop in market value for 164 stocks in the software, financial services and asset management sectors.

Why it matters

The rapid pace of new AI tools being brought to market by startups like Anthropic and OpenAI, as well as Alphabet Inc.'s Google, is making the long-theorized disruption seem much more imminent, rattling Wall Street pros and raising concerns about the future impact of AI on various industries and businesses.

The details

Last week's sell-off was sparked by announcements from AI startup Anthropic about new tools designed to automate work tasks in industries like legal, data services and financial research. This led to fears that these innovations would doom countless businesses, causing investors to dump a wide range of stocks. The damage was severe, with Thomson Reuters Corp.'s Canada-listed shares plunging 20% and financial research firm Morningstar Inc. posting its worst week since 2009. Software makers like HubSpot Inc., Atlassian Corp. and Zscaler Inc. each tumbled more than 16%.

  • Last week, investors dumped a broad range of stocks in response to Anthropic's AI announcements.
  • In just the past month, Google also roiled video-game stocks with the release of a tool that can create an immersive digital world with simple image or text prompts.
  • Another Anthropic release, a work assistant based on its Claude coding service, sent software stocks tumbling.

The players

Anthropic

An AI startup that released new tools designed to automate work tasks in various industries, sparking fears of widespread disruption.

OpenAI

An AI research company that released the ChatGPT tool, which has been a topic of conversation regarding AI's disruptive potential.

Alphabet Inc.

Google's parent company, which released a tool that can create an immersive digital world, roiling video-game stocks.

Microsoft Corp.

The tech giant lost $357 billion in market value in a single day after slowing revenue growth in its cloud-computing business fanned anxieties about heavy spending on AI.

ServiceNow Inc.

The software company sank 10% following disappointing earnings reports, adding to the angst in the sector.

Got photos? Submit your photos here. ›

What they’re saying

“Things are shipping out weekly, daily. The blast radius of companies that could be impacted by AI is going to grow daily.”

— Daniel Newman, Chief Executive Officer, Futurum Group

“It was the stalwarts that failed us. If your results and your guidance aren't up to snuff, it's kind of like: What confidence should we have for the rest of the sector?”

— Jackson Ader, Software Analyst, KeyBanc

“I suspect some companies will endure, embrace AI, and prosper, but others will see permanent disruption to their business models or prospects. It is very hard to know which is which right now.”

— Jim Awad, Senior Managing Director, Clearstead Advisors

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.