— U.S. index futures nudged higher Tuesday night after a pullback in technology stocks sent major benchmarks into the red during regular trading. S&P 500 futures rose about 0.16% and Dow futures gained roughly 147 points (0.29%), while Nasdaq 100 futures were largely unchanged. The retreat followed a session in which investors rotated out of high‑growth, AI‑exposed names and into more cyclical issues, leaving the S&P 500 and Nasdaq with notable declines. Market participants entered the overnight session watching earnings and forthcoming labor data for clues on the move’s durability.
Key takeaways
- S&P 500 futures were up roughly 0.16% in the extended session, while Dow futures added about 147 points (0.29%); Nasdaq 100 futures showed little change.
- In the prior regular session the S&P 500 fell about 0.8%, the Nasdaq Composite declined approximately 1.4%, and the Dow dropped nearly 167 points (about 0.3%) after earlier hitting an intraday record.
- Chipotle shares slid nearly 6% in after‑hours trade after reporting a fourth consecutive quarterly traffic decline and forecasting flat same‑store sales for 2026 despite beating consensus quarterly revenue and adjusted earnings.
- Advanced Micro Devices shares dropped in the high single digits after management issued cautious first‑quarter guidance—analysts and the market parsed a range of roughly 7%–9% intraday losses for the stock.
- Software stocks notably underperformed: ServiceNow and Salesforce each fell close to 7% amid concerns that recent AI product announcements could disrupt incumbent software revenue models.
- Investors are focused on upcoming data and corporate reports: ADP private payrolls for January are due ahead of the partial government shutdown’s disruption of the Bureau of Labor Statistics schedule, and heavyweight tech earnings from Alphabet (Wednesday) and Amazon (Thursday) are on tap.
Background
The market move comes amid a broader rotation that began in recent months as investors reassessed which companies are most likely to benefit from artificial intelligence and which may face disruption. A period of strong gains for growth names over the prior three years left certain valuations stretched, prompting some profit‑taking when new information—earnings, product launches, or guidance—favored differentiation over blanket AI optimism.
Recent product announcements, including a new AI tool aimed at legal work, heightened scrutiny of the software sector’s business models and revenue durability. That shift helped cyclical names such as Walmart outperform on the session, as money moved toward companies seen as less exposed to concentrated AI risk. Market strategists have emphasized that the path to identifying long‑term winners from AI remains uncertain, and this uncertainty is now factoring into day‑to‑day price action.
Main event
Trading in the regular session featured notable weakness in large technology and software names. Nvidia and Microsoft each lost more than 2%, while other infrastructure names tied to AI—Broadcom, Oracle and Micron Technology—also finished lower. The tech sector was the worst performer in the S&P 500, off over 2% on the day.
Software firms took a particularly sharp hit after announcements raised questions about competitive pressures. ServiceNow and Salesforce slid nearly 7% each as investors priced in potential headwinds to subscription revenue and software pricing power. Private credit stocks such as Blue Owl and TPG also declined amid the sector‑wide risk‑off in AI‑exposed software businesses.
Company‑specific after‑hours moves added to the extended‑session dynamics. Chipotle reported a fourth consecutive quarter of falling traffic and guided to flat same‑store sales for 2026; shares fell about 6% after hours despite an earnings beat. Match Group surged about 7% after topping fourth‑quarter revenue and earnings expectations and raising full‑year cash‑flow guidance. Video‑game publisher Take‑Two lifted its 2026 net bookings outlook and saw shares jump nearly 5%.
AMD’s guidance for the first quarter—management called for revenue near $9.8 billion, plus or minus $300 million, and non‑GAAP gross margin around 55%—fell short of some analysts’ hopes and prompted a sizeable selloff in the chipmaker’s stock during extended trade. Market participants noted that while the guidance was not drastically off Street estimates, investor positioning and sensitivity around semiconductor demand amplified the reaction.
Analysis & implications
The near‑term impact of the tech sell‑off is threefold: it trims headline index returns, raises the bar for upcoming earnings to reinstate confidence, and sharpens sector differentiation. When a concentrated group of high‑weighting stocks underperforms, headline indices such as the S&P 500 can show outsized moves even if breadth across smaller sectors is mixed.
Investors’ growing focus on which companies will be net beneficiaries of AI—and which will face disruption—means volatility is likely to remain elevated around product launches and guidance. The market appears to be moving from generalized AI enthusiasm toward more selective positioning, increasing sensitivity to company‑level signals rather than industrywide narratives.
Economic data will also shape the next leg of this adjustment. ADP’s private payrolls print for January and subsequent readings will influence investors’ views on labor strength, consumption and the Federal Reserve’s policy calculus. In a market where valuations have been extended for some winners, even modestly softer macro data or cautious guidance can trigger outsized risk‑off reactions.
For corporate issuers and portfolio managers, the message is to expect more granular differentiation: earnings quality, margin resilience and clarity on product monetization will matter more than ever. Passive exposures to concentrated growth names may underperform a more actively managed, diversified approach if this rotation continues.
Comparison & data
| Item | Prior session | Extended/after‑hours move |
|---|---|---|
| S&P 500 (regular session) | −0.8% | futures +0.16% |
| Nasdaq Composite | −1.4% | Nasdaq 100 futures ~unchanged |
| Dow Jones Industrial Average | −167 points (~−0.3%) | futures +147 points (~+0.29%) |
| Chipotle (after‑hours) | — | ≈−6% |
| AMD (after‑hours) | — | ≈−7% to −9% |
The table shows how headline index moves during the cash session contrasted with modest gains in futures overnight, while several individual names experienced sizeable after‑hours swings. This pattern underscores the market’s sensitivity to company news and guidance, which can diverge from broader index behavior in the short term.
Reactions & quotes
“So yesterday marked a dramatic acceleration of the trend we’d seen of late… the nine worst‑performing companies in the S&P 500 year‑to‑date are all in the software and related services sectors,” summarized a note from Deutsche Bank’s macro research team, highlighting the concentration of recent weakness.
Jim Reid, Deutsche Bank (institutional research)
“I think you have a number of cross‑currents impacting the markets all at once. Now, markets are starting to be a bit more particular and nuanced with respect to which companies they want exposure to,” said a market strategist discussing the rotation and stretched valuations after a multi‑year rally.
Joe Tanious, Northern Trust Asset Management (chief investment strategist, North America)
“People should expect that it goes down before it comes back up,” said Novo Nordisk’s CEO when addressing the company’s pre‑released 2026 forecast and its expected near‑term trajectory.
Mike Doustdar, Novo Nordisk (CEO)
Unconfirmed
- It is not yet established which specific companies will emerge as the long‑term winners from AI-driven disruption; current market moves reflect investor expectations rather than definitive outcomes.
- The precise magnitude of AMD’s fundamental demand change is still being evaluated; initial price reactions reflect sentiment and guidance interpretation rather than confirmed demand trends.
- Whether Novo Nordisk’s near‑term weakness presages a sustained sector‑wide pharmaceutical slowdown is unclear and requires further quarterly data for confirmation.
Bottom line
The market is in a phase of re‑rating where concentrated tech and software winners are being re‑tested on earnings, guidance and product announcements. Short‑term volatility is likely to persist as investors parse firm‑level disclosures and macro datapoints such as January payrolls.
Key near‑term catalysts to watch: ADP’s private payrolls release, Alphabet and Amazon earnings this week, and next‑round corporate guidance from large AI‑exposed firms. How those items land will help determine whether this rotation broadens into a sustained sectoral shift or remains a short‑lived correction within a longer‑term bull market.
Sources
- CNBC — market coverage and corporate after‑hours moves (media)
- Deutsche Bank — macro research commentary (institutional research)
- Northern Trust Asset Management — strategist commentary (asset manager)
- Chipotle Mexican Grill — investor relations and earnings release (company)
- Advanced Micro Devices — investor relations and guidance (company)
- Novo Nordisk — investor relations and pre‑release guidance (company)