Overview of What's News in Markets
Host: Jack Pitcher — The Wall Street Journal — Saturday, February 7
This episode reviews the week’s biggest stock moves and the news driving them. The dominant theme: renewed AI-driven market volatility that punished some software and data-research names while boosting AI-infrastructure suppliers, alongside a sharp pullback in crypto that hit related stocks.
Market performance snapshot
- Nasdaq Composite: down 1.8% for the week (tech-heavy weakness)
- S&P 500: down 0.1% for the week (broad-based)
- Dow Jones Industrial Average: up 2.5%, closing at a record above 50,000 (less software exposure)
- Volatility was concentrated midweek (Tuesday) after AI model announcements; buyers pushed some gains back by Friday.
Major stories this week
AI-driven sell-off in software, data and services
- Prompted by rapid advances in generative AI, investors began re-evaluating long-held assumptions about demand for human-driven software, data and research services.
- A specific catalyst: new features in Anthropic’s Claude (AI model) demonstrating capabilities in legal research and review, which spooked investors in companies that sell those services.
- Result: several software and research-oriented stocks saw their sharpest single-day declines since the pandemic.
Gartner — big loser
- Gartner reported lower-than-expected Q4 earnings and issued a guidance below Wall Street estimates.
- Investors are already worried generative AI could reduce demand for Gartner’s research and advisory services; the results reinforced that fear.
- Market reaction: shares fell ~21% on the earnings day, down ~25% on the week, and more than 70% from their all-time high roughly a year earlier.
AI infrastructure winners — Supermicro spotlighted
- Firms that supply the hardware for AI (chips, servers, memory) continue to attract capital as big tech ramps AI investments and data-center buildouts.
- Super Micro Computer (Supermicro) reported a twofold increase in sales in its fiscal second quarter and a Q3 forecast ahead of expectations; management attributed growth to AI infrastructure demand.
- Supermicro shares rallied ~18% on the week, placing the stock among the S&P 500’s top performers.
Crypto slump and related equities
- Bitcoin fell below $64,000 on Thursday — roughly a 50% drop from its October peak — pressuring crypto-related stocks.
- Contributing factors: risk-off investor behavior, unwinding of leveraged Bitcoin positions, and a dollar rally tied to the market reaction after President Trump named Kevin Warsh for Fed chair.
- Coinbase (largest U.S. crypto exchange): shares fell ~15% on the week.
- MicroStrategy (large corporate Bitcoin holder): shares fell ~10% on the week and are down ~60% over the past year.
Key takeaways
- AI is re-shaping sector risk: investors are differentiating between businesses vulnerable to AI substitution (research, legal review, some software tools) and those supplying AI infrastructure (servers, chips, memory).
- Earnings and guidance matter more than ever when narratives shift — Gartner’s weak guide amplified a broader tech sell-off.
- Crypto remains highly sensitive to macro moves and sentiment; big drawdowns in Bitcoin continue to spill over into equities tied to crypto exposure.
What to watch next
- Announcements and demos from AI firms (Anthropic, OpenAI, others) that could change industry demand assumptions.
- Further earnings/guidance from research/data firms and major software names — especially any commentary on AI substitution risk.
- Capital expenditures and order flows at server, chip and memory suppliers as a barometer of real AI infrastructure spend.
- Bitcoin price action, leveraged-position liquidations, and dollar/Fed developments (including any Fed leadership news) that could influence risk assets.
- Regulatory or legal developments around crypto and AI that could affect investor sentiment.
Notable quote
- “Rapid advancements in AI are making investors question some long-held assumptions.” — encapsulates the week’s market driver.
Credits: Produced by Alexis Moore; supervising producer Jana Heron; host Jack Pitcher.