Morning Bid: AI scatters the tech herd

• Since ChatGPT's launch, S&P 500 software and services stocks have turned negative while chip stocks have nearly tripled, showing investor discrimination between AI winners and losers
• Walmart hit $1 trillion market cap for the first time, joining tech heavyweight ranks after a year-long rally driven by AI integration in its operations
• Anthropic's new 'agentic AI' tool for task automation triggered the software selloff, with concerns spreading globally to affect software firms in India while Asian chip and hardware companies continued performing well

Market Summary: AI Disruption Hits Tech Sector

Key Developments:

Global software stocks entered a second day of sharp declines following Anthropic's Friday announcement of a new agentic AI tool for automating work tasks. The selloff took nearly two full trading days to materialize, catching investors off-guard. Major U.S. indexes fell approximately 1% on Tuesday, with Nasdaq futures remaining negative Wednesday morning.

Market Divergence:

Since ChatGPT's launch, S&P 500 software and services stocks have turned negative, while chip stocks have nearly tripled—highlighting stark AI winner-loser differentiation. Asian hardware and chip firms continue performing well, while Indian software companies face pressure.

Notable Movers:

• Walmart became the first retailer to surpass $1 trillion market valuation Tuesday, following a year-long rally driven by early AI adoption
• Novo Nordisk shares tumbled after the weight-loss drug maker warned of disappointing 2026 profit guidance
• Alphabet earnings Wednesday evening will test market sentiment further

Economic Indicators:

Economic acceleration signs emerged from rising Treasury yields, strong business loan growth in Fed data, and Australia's surprise rate hike this week. Key U.S. data due includes ISM services PMI, ADP private jobs report, and S&P Global services PMI.

Other Markets:

The Japanese yen weakened ahead of weekend elections. China's yuan strengthened to near three-year highs before Lunar New Year. Gold and oil prices rose amid escalating U.S.-Iran tensions following Tuesday's U.S. military strikes. Bitcoin hit its lowest level since before the November 2024 U.S. election.

Upcoming: ECB and Bank of England policy meetings scheduled for Thursday.