Nasdaq slumps 2% as tech and transport stocks slide on AI disruption fears

Market Overview - Wall Street indexes experienced a sharp decline, with the Nasdaq falling 2% as investors sold off tech shares and transportation stocks due to concerns over AI disruption [1][2] - The Dow Jones Industrial Average dropped 669.42 points (1.34%) to 49,451.98, the S&P 500 fell 108.71 points (1.57%) to 6,832.76, and the Nasdaq Composite decreased by 469.32 points (2.03%) to 22,597.15 [3] Sector Performance - Investors shifted from riskier sectors to more defensive investments such as utilities, consumer staples, and real estate [2] - Cisco Systems reported a quarterly adjusted gross margin below estimates, leading to a 12.3% drop in its shares, which negatively impacted the broader technology sector [5] - The S&P 500 software index fell 1.7%, with AppLovin being the largest decliner at 19.7% after disappointing fourth-quarter results [6] Transportation Sector - The Dow Jones Transportation Average fell 4%, with significant losses in companies like Landstar (down 15.6%), CH Robinson (down 14.5%), and Expeditors International (down 13.2%) [7] - Concerns about AI disruption in the transportation sector were heightened by a new tool from Algorhythm Holdings, which caused investor worries [7] Economic Indicators - A stronger-than-expected jobs report raised concerns that the Federal Reserve may be less likely to cut rates, impacting investor sentiment [4] - The latest data showed a decrease in new applications for unemployment benefits, but the decline was less than expected, indicating lingering disruptions from winter storms [4][8] Semiconductor and Technology Stocks - The Philadelphia SE Semiconductor index fell 2.5%, while Equinix shares rose 10.4% after forecasting annual revenue above estimates, driven by strong AI-linked demand [9] - Personal-computer makers faced pressure, with Lenovo warning of shipment issues due to a memory-chip shortage, affecting shares of HP (down 4.5%) and Dell Technologies (down 9%) [9]