Dow ends below 50,000 threshold for first time since Friday as AI fears spark wider stock selloff

By Joy Wiltermuth

It looked like a 'classic' risk-off day on Wall Street, said one strategist

The Dow closed below the 50,000 threshold for the first time since Friday, as fears spread that artificial intelligence might disrupt areas of business beyond tech and software.

Investors had few places to hide in the stock market on Thursday, as fears around the potential for artificial intelligence to disrupt business as usual moved beyond the tech and software sectors.

The thrashing left the Dow Jones Industrial Average DJIA below the 50,000 mark for the first time since Friday, while the Dow, S&P 500 SPX and Nasdaq Composite COMP each booked their sharpest daily percentage drops in three weeks, according to Dow Jones Market Data.

"There's certainly an AI angle to it," said Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research, of the selloff -noting that tech and software stocks endured the brunt of it.

Yet the Thursday rout also swept up energy, materials and small-cap stocks in the Russell 2000 RUT, as well as other areas that recently benefited from a broadening out of the bull market beyond megacap tech stocks MAGS.

On the flip side, utilities, consumer-staples and real-estate stocks were being treated like ports in the storm, as were 10-year BX:TMUBMUSD10Y and 30-year BX:TMUBMUSD30Y Treasurys. That hasn't always been the case since President Trump started using tariff threats against major U.S. trade partners last year.

Even the battered ICE U.S. Dollar Index DXY edged up 0.1% on Thursday against a basket of rival currencies, after it recently traded near a four-year low.

"If you take that, it's a classic risk-off day," Gordon said.

Another factor putting Wall Street on edge was an ugly January report on existing-home sales, despite an easing in new 30-year fixed mortgage rates to about 6.09%, from closer to 6.16% around the start of this year.

The median home sale price also fell 2% to $397,0000, according to Nancy Vanden Houten, lead U.S economist at Oxford Economics, who said such declines were typical in winter months. The median home price still was up 0.9% annually, she wrote in a Thursday client note.

Yet economic data have been an added trigger for volatility VIX lately, with this week's jobs report for January surprising to the upside and catching Wall Street off guard.

Friday also could bring more surprise on that front, with investors bracing for a fresh inflation reading via the consumer-price index for January, which is expected to remain above the Federal Reserve's 2% annual inflation target.

Following Thursday's selloff, the S&P 500's gain for the year has been wiped out - with the index now off 0.9% in 2026, the Nasdaq off 2.8% and the Dow up less than 3%, according to FactSet.

-Joy Wiltermuth

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02-12-26 1748ET