Morning Bid: Selling begets selling

• AMD fell 17% and Palantir declined 12%, with volatility spreading to Asian markets where South Korea's Kospi dropped nearly 4%
• Alphabet announced capital expenditure of $175-$185 billion for 2026, roughly double prior year levels, causing its stock to fall 2% after hours
• The software sector has lost almost $1 trillion in market value in just one week as anxiety grows over AI's disruptive threat to existing businesses

Market Summary: Tech Selloff Intensifies as AI Investment Concerns Mount

Key Developments:

Tech sector anxiety deepened beyond software into chipmakers and mega-caps. Advanced Micro Devices (AMD) plunged 17% while Palantir dropped 12%. The software sector has lost nearly $1 trillion in value over one week as investors question whether AI disruption poses more threat than opportunity to existing businesses.

Alphabet's Massive Spending Plans:

Google parent Alphabet announced 2026 capital expenditure of $175-185 billion—potentially doubling from prior levels and exceeding analyst expectations by 50%. Despite this aggressive AI investment push, the stock fell 2% after-hours, reflecting investor concerns about returns on massive AI spending by "hyperscalers."

Broader Market Impact:

• Global contagion spread with South Korea's Kospi falling nearly 4%
• Bitcoin dropped below recent lows for the first time since the 2024 U.S. election, down 40%+ from October peaks
• Silver crashed as much as 17% overnight, finishing down 10%
• Nasdaq and S&P 500 futures stabilized Thursday morning

Sectoral Rotation Continues:

The S&P 500 value index gained for a fifth consecutive session while growth stocks declined, signaling a shift from tech to cyclical stocks. The equal-weighted S&P 500 rose 0.8%, suggesting broader market participation beyond mega-caps.

Economic Data:

January surveys showed upbeat economic signals, though ADP private payrolls rose less than forecasted. Currency and bond markets remained relatively stable.

Upcoming Catalysts:

• Amazon earnings after Thursday's close
• ECB and Bank of England rate decisions (no moves expected)
• U.S. December JOLTS data and weekly jobless claims