Technology Sector Selloff Intensifies as S&P 500 Weighs on Economic Data Outlook

NEW YORK, February 06, 2026 — The U.S. technology sector is experiencing a deep selloff amid concerns over AI disruption, dragging the S&P 500 (^GSPC) lower and erasing 2026 gains. The S&P 500 software and services index (^PKUS) fell 17% in five days as earnings disappointments, including from Microsoft (MSFT), amplify fears of business-model disruption. Rotation is the dominant theme this year, with energy, consumer staples, and industrials outperforming. However, with tech accounting for about one-third of the index's weight, broader market performance remains sensitive to continued weakness in the sector. This week's data calendar includes January nonfarm payrolls (expected +70,000), a jobs survey showing January layoffs surged, and the January CPI, with expectations for the Federal Reserve to hold its June meeting and possibly delay further rate cuts. Fed Fund futures price in two more quarter-point reductions by December despite a recently-ended three-day government shutdown shifting some reports.