Stock Market Today, February 3: AI Fears Trigger Nasdaq Tumble
The stock market experienced a turbulent day on February 3, with the Nasdaq Composite (NASDAQINDEX:^IXIC) taking the brunt of the fall. The index dropped 1.43% to 23,255.19, primarily due to a tech sector downturn. The S&P 500 (SNPINDEX:^GSPC) also saw a decline, falling 0.84% to 6,917.81, while the Dow Jones Industrial Average (DJINDICES:^DJI) managed to touch a record intraday high before slipping 0.34% to 49,240.99.
Market Movers and Shakers
Walmart (NASDAQ:WMT) was a standout performer, crossing the $1 trillion market-cap mark for the first time. PepsiCo (NASDAQ:PEP) also gained, closing up 4.93% at $162.85 after beating earnings expectations. However, software and fintech stocks like PayPal (NASDAQ:PYPL) and Gartner (NYSE:IT) led the broader market decline, both sliding dramatically on disappointing earnings reports. Other software stocks, such as Salesforce (NYSE:CRM), also tumbled.
What This Means for Investors
Tech stocks were the primary drivers of the day's drawdown, with big names like Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN) all losing ground. Concerns about the AI bubble and over-concentration in tech stocks, coupled with new announcements from AI startup Anthropic, put further pressure on software stocks. This led to a rotation out of high-risk growth stocks and into value investments, with big retailers like Walmart, Costco (NASDAQ:COST), and Target (NYSE:TGT) seeing gains.
Global Market Moves
Reports of the U.S. Navy shooting down an Iranian drone heightened fears of increased tensions in the Middle East, causing oil prices to spike. Brent crude rose 2.58% to $68.01 a barrel. Meanwhile, the 10-year Treasury hit a multi-month high as bond yields rose in both the U.S. and Europe.
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*Stock Advisor returns as of February 3, 2026. Emma Newbery (https://www.fool.com/author/20301/) has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Microsoft, Nvidia, Palantir Technologies, PayPal, Salesforce, Target, and Walmart. The Motley Fool recommends Gartner and recommends the following options: long January 2027 $42.50 calls on PayPal and short March 2026 $65 calls on PayPal. The Motley Fool has a disclosure policy (https://www.fool.com/legal/fool-disclosure-policy/). The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
