Wall Street is in the grip of disruption worries from AI. It first started with investors dumping shares of software companies but soon spread to sectors seen as vulnerable to automation, driving sharp losses in U.S. stocks this week.
The AI scare trade did not spare even sectors such as private credit, real estate brokers, data analytics, legal services and insurers.
“With fear driving market sentiment, investors remain in ‘sell first think later’ mode, asking ‘who is next’ and showing no mercy for anything remotely seen as an AI loser,” Barclays equity strategist Emmanual Cau said.
Here’s a look at how various sectors were impacted by the selloff:
SOFTWARE AND SOFTWARE-EXPOSED LOANS
The S&P 500 Software & Services index (.SPLRCIS), opens new tab has lost about $2 trillion in value since its peak in October. Half of the losses came in the past two weeks, on concerns that fast-advancing AI tools could upend traditional subscription and enterprise tools.
So far this year, the worst-performing Nasdaq 100 stocks include Atlassian (TEAM.O), opens new tab down 47%, Intuit (INTU.O), opens new tab down 40% and Workday (WDAY.O), opens new tab, which has lost a third of its value.
Salesforce tumbled about 30% in 2026, while Adobe (ADBE.O), opens new tab is down 25% and CrowdStrike (CRWD.O), opens new tab 12%.
“There’s this idea that AI is somehow going to replace built‑out models in the near term – models that have been in place for many years and from which companies have profited strongly,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
FINANCIAL BROKERAGE, DATA ANALYTICS & LEGAL SERVICES
The financial industry, particularly brokerages and data analytics firms, were hammered after wealth management firm Altruist introduced AI-enabled tax planning features, stoking fears of the fast-advancing technology upending their business models.
Shares of brokers LPL Financial (LPLA.O), opens new tab, Raymond James Financial (RJF.N), opens new tab and Charles Schwab (SCHW.N), opens new tab fell more than 7% on Tuesday.
Index provider S&P Global (SPGI.N), opens new tab, which issued a downbeat earnings forecast for 2026, has slumped more than 25% in February and was set for its worst month since 2009. Moody’s (MCO.N), opens new tab, Factset Research (FDS.N), opens new tab and MSCI (MSCI.N), opens new tab also fell sharply this month.
Nasdaq-listed shares of Thomson Reuters touched a near five-year low last week on concerns about AI hurting its legal services business.