Closing Bell: Market Selloff Continues as Mag 7 Cap-ex Spending Accelerates

Key Points

• S&P 500 fell 1.23%, Nasdaq-100 dropped 1.38%, and Russell 2000 slid 1.79%, with defensive sectors like Staples and Utilities outperforming.
• Amazon beat revenue estimates but missed on EPS and issued 2026 cap-ex guidance of $200B—well above consensus.

Weakness in the technology sector continued as Mag 7 companies increased capital-expenditure spending at a faster pace than expected, while liquidity drained from niche areas of the market such as crypto. The S&P 500 (SPX) finished down 1.23%, the Nasdaq-100 (NDX) dropped 1.38%, and the Russell 2000 (RUT) also remained under pressure, closing lower by 1.79%. Consumer Staples and Utilities led the gains, while Materials and Consumer Discretionary lagged.

Amazon Falls After-Hours as Cap-Ex Guidance Exceeds Expectations

Amazon (AMZN) reported earnings after the close that fell short of analyst expectations, both for the current quarter and in forward guidance. The company posted Q4 net sales of $213.4 billion, above analyst estimates of $211.33 billion, but adjusted EPS came in light at $1.95 versus expectations of $1.97. Amazon’s 2026 capital-expenditure guidance of $200 billion was well above consensus forecasts, sending shares lower in post-report trading.

Technology Stocks Continue to Face Aggressive Selling Pressure

The increase in capital-expenditure spending from mega-cap tech stocks is not the sole driver behind the selloff in technology shares. Ongoing concerns surrounding AI in the software space continue to weigh on names such as Microsoft (MSFT) and Palantir (PLTR), as the perceived “threat” of AI replacing or eroding portions of their market share grows.

Market Events for Tomorrow

• 10:00 AM ET: Prelim UoM Consumer Sentiment
• 12:00 AM ET: FOMC Member Jefferson Speaks      
• 03:00 PM ET: Consumer Credit

Notable Earnings for Tomorrow

• A.M: AER, AN, BIIB, CG, CBOE, CNC, NWL, PM, RXO, TM, UAA, VRTS

P.M: N/A

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