Wall Street Rout Deepens as Tech, Crypto Slide: Markets Wrap
Another wave of heavy selling hit technology stocks and crypto, while weak US jobs data intensified an equity rout already driven by concerns about artificial-intelligence valuations. As a result, software shares slid sharply, and Bitcoin suffered one of its steepest drops yet. Meanwhile, in late trading, Amazon.com Inc. plunged after releasing earnings.
Stocks continued retreating from near-record levels, and the S&P 500 fell 1.2%. At the same time, the Nasdaq 100 recorded its worst three-day stretch since April’s meltdown. Meanwhile, Bitcoin slid to about $63,000, marking a decline of nearly half from its October peak. As risk appetite faded, Treasuries rallied and pushed short-term yields to their lowest level of the year. In commodities, silver plunged roughly 20%.
Valuations Crack as Selling Broadens
The selloff in AI-linked assets coincided with growing doubts about whether massive investments in the technology will justify elevated valuations. For instance, Amazon plans to spend $200 billion this year on data centers, chips and equipment. Likewise, Microsoft Corp. and Alphabet Inc. declined after earnings highlighted similar spending commitments.
As pressure mounted, the latest decline began carving into benchmarks that had climbed to valuation levels last seen during the dot-com era. Notably, the Nasdaq 100 has lost more than $1 trillion since Federal Reserve officials signaled reluctance to cut interest rates in the near term. While earlier losses were concentrated in growth stocks, Thursday’s decline broadened, with nine of 11 S&P 500 industry groups retreating. Consequently, the equal-weighted index slipped from a record high.
At the same time, optimism around economic resilience faded as fresh data exposed weakness in the labor market. Job openings unexpectedly fell in December to the lowest level since 2020, while layoffs increased. In addition, companies announced the most January job cuts since 2009, and jobless claims rose more than forecast. As a result, concerns grew that economic momentum may be slowing faster than expected.
Market volatility reflected those fears. The VIX climbed to around 22, and a software-focused exchange-traded fund dropped 5%. Meanwhile, Bitcoin fell 13%, the dollar strengthened, and oil prices declined after Iran confirmed US talks scheduled for Friday. Altogether, the moves suggested that selling pressure was no longer limited to narrow pockets of the market.
Crypto Slide Intensifies Market Stress
Bitcoin’s plunge deepened as leveraged positions unwound and broader financial turbulence erased gains accumulated since the post-election speculative surge. Earlier geopolitical tensions had already curbed risk-taking, and that pressure accelerated liquidations across digital assets. As funds sold holdings to meet redemptions, a self-reinforcing cycle of declines took hold.
At the same time, stress spread across the broader digital-asset ecosystem. Firms with heavy exposure to Bitcoin reported significant valuation losses, and balance sheets came under renewed scrutiny. Moreover, recent declines pushed several crypto-focused companies below key cost thresholds for the first time in years.
Corporate developments added to market volatility. Several large companies delivered cautious forecasts, announced layoffs, or outlined strategic shifts, while others exceeded expectations and gained ground. Meanwhile, moves across energy, banking, transportation and consumer sectors underscored how uncertainty is rippling well beyond technology and crypto.
Taken together, the recent moves highlight how quickly confidence can fracture when valuations, growth expectations and policy outlooks collide. As investors reassess risk across asset classes, markets appear set for continued volatility in the near term.
