Wall Street closed sharply lower on Thursday, driven by risk-off sentiment amid fears of heavy AI spending and weak labor-market data. The Dow Jones fell 1.2%, the Nasdaq dropped 1.6%, and the S&P 500 slid 1.2%. Tech, discretionary stocks were hit hard, with the fear gauge VIX rising 16.8% to 21.77.

Tech stocks bore the brunt of the selling as investors grew wary of AI-related capital spending and soft labor-market data. The sell-off deepened for software stocks, with the iShares Expanded Tech-Software Sector ETF (IGV) falling 5%. Salesforce Inc. (CRM) and Microsoft Corporation (MSFT) declined 4.8% and 5%, respectively.

For the week ending Jan. 31, initial jobless claims rose by 22,000 to 231,000, while continuing claims increased by 25,000 to 1,844,000. The 4-week moving average for initial claims was 212,250, and for continuing claims, it was 1,850,750. The rise in jobless claims added to market concerns about economic momentum.

Read more at Nasdaq: Stock Market News for Feb 6, 2026