U.S. technology stocks have stumbled in early 2026, pressured by AI disruption fears and a rotation into previously lagging sectors.
The broader market may struggle to extend gains without support from tech, which carries a dominant 33% weighting in the S&P 500.
All eyes now turn to Nvidia’s quarterly results, seen as a pivotal moment for sentiment across the AI-driven equity trade.
The semiconductor giant, an AI bellwether, could influence the trajectory of the “Magnificent Seven” and wider market momentum.
Software stocks have been hardest hit, with the S&P 500 software index plunging 23% this year amid concerns over AI-related upheaval.
Shares of Intuit and Salesforce have fallen sharply, reflecting investor anxiety over earnings durability in an evolving technology landscape.
By contrast, semiconductor and hardware stocks have gained 7% and 4% respectively, underscoring diverging performance within the sector.
Despite strength in energy, materials, and industrials, sustained market upside may depend on whether Nvidia restores confidence in the tech trade.
