A new wave of soft-apocalypse and fears over duties: US indices lost more than 1%

US stocks fell sharply on Monday, February 23: investors were once again gripped by fears of AI's negative impact on established business processes. Researchers from Citrini Research published a report claiming that the AI boom could lead to unemployment at the level of 10%. In addition, Wall Street is trying to assess what the uncertainty associated with the abolition of some of Donald Trump's duties and the introduction of others will lead to, writes CNBC.

- The S&P 500 fell more than 1% on February 23 and is back in the red if you count back to the beginning of 2026.

- The Dow Jones Industrial Average index lost 1.7%. It was pulled down by IBM shares, which collapsed by 13% after Anthropic introduced new software features for its Claude Code product. As a result, IBM suffered its biggest daily collapse since October 2000, Bloomberg calculated.

- The tech-heavy Nasdaq Composite was down 1.1 percent.

- The Russell 2000 index of small and mid-cap stocks also suffered significant losses amid the sell-off, falling 1.6%.

The market, which has been gripped by fears of the so-called soft-apocalypse for weeks now, nervously embraced a study by Citrini Research on Monday that claims the AI boom could lead to 10% unemployment.

Software developers came under pressure again as a result. Shares of Microsoft lost 3%, quotes CrowdStrike collapsed by almost 10%. ETF iShares Expanded Tech-Software Sector, which tracks the shares of software manufacturers, updated on Monday a yearly low, noted CNBC. Salesforce, Adobe and DocuSign also hit year-to-date lows.

The financial sector was also hit, which was the main outsider within the S&P 500, the broadcaster noted. Shares of American Express fell 7%, also putting pressure on the Dow. Mastercard securities fell almost 6%.

Fears over AI replacing a number of companies' products have also spread to the cybersecurity sector after Anthropic late last week added a new feature to analyze database vulnerabilities to its Claude AI, CNBC recalls . The Global X Cybersecurity ETF lost 4%. Zscaler quotes collapsed by 10%, Fortinet and Okta securities fell by more than 5%.

At the same time, defensive segments of the market, such as the consumer staples sector, showed growth. Shares of Walmart and Procter & Gamble rose more than 2%. Healthcare, energy, utilities and real estate were in the plus.

At the same time, investors are concerned about the impact of new trade restrictions on importers. Donald Trump on Saturday increased a new global duty from 10% to 15% and on Monday warned of higher rates for countries that will "play games" after the Supreme Court last week struck down most of the U.S. president's trade measures. Shares of duty-sensitive Nike and Wayfair, which reacted with gains to the court's decision, fell in price on Monday.

- The big question for the U.S. economy is what happens at the end of the 150-day period during which Trump's new duties can go into effect without Congressional approval, Landsberg Bennett Private Wealth Management Chief Investment Officer Michael Landsberg explained to CNBC. "If trade policy goes in the same direction, we could very well end up in the Supreme Court again this year," he noted. - The tug-of-war over duties is likely to remain a distraction for markets for the rest of the year, albeit with less effect than the shock last April."

- The new 15% interest rate is unlikely to have a significant impact on economic activity, Edward Jones analyst Angelo Kourcafas told Bloomberg. "We advise investors not to overreact to the headline news and reiterate a constructive view on global equity markets, which is supported by strong corporate earnings growth and sustained economic activity," he emphasized. Kourkafas believes that against the backdrop of the technology sector lagging due to AI concerns, the key success factor for investors this year will be the balance between growth and value stocks. "We recommend increasing positions in the industrials, healthcare and consumer durables sectors, offset by reducing positions in consumer staples and utilities," he added.

- "The selloff in the software sector is a reminder of what happens when momentum-driven segments reverse," Steve Sosnick of Interactive Brokers told Bloomberg. - The broader and more important question is how many sectors still have to turn down before they drag the entire market down with them."

This article was AI-translated and verified by a human editor