AI Spending Spree Sparks Wall Street Rout, Commodities Tumble on Easing of Global Geopolitical Tensions

Wall Street ended sharply lower on Thursday, with the Nasdaq dragged to its lowest since November by losses in Microsoft, Amazon and other tech heavyweights after Alphabet said it could double capital spending on AI in the race to dominate the emerging technology.

The Nasdaq fell 1.6% as software stocks suffered their worst week since 2008, dropping over 11% amid fears that AI tools from companies like Anthropic could disrupt traditional software business models. AMD plunged 17% on disappointing earnings, while Qualcomm sank 8.5% on weak guidance citing memory chip shortages.

Alphabet shares dropped over 5% despite exceeding earnings expectations, as the company announced capital expenditures of up to $185 billion for 2026 more than double 2025 levels—to expand AI infrastructure. The announcement boosted AI infrastructure suppliers like Broadcom, which rose on expectations of increased demand for custom chips.

Amazon shares tumbled 9% following its earnings report, revealing capital expenditure plans of approximately $200 billion for 2026, far exceeding Wall Street expectations. Investors are closely watching the AWScloud division, which is projected to grow revenue by 21%.

Commodity prices slid, led by silver, amid a broad market sell-off as investors reversed an earlier rush into hard assets following a easing of global geopolitical tensions.

Bitcoin crashed 15% to $62,340, falling below $67,000 for the first time since late 2024 and erasing all gains from Trump’s second term. The selloff reflects investor flight from risky assets, profit taking by early investors, drying ETF inflows, and Treasury Secretary Bessent ruling out government support for crypto.

Initial jobless claims jumped to 231,000, well above the expected 212,000, while job openings plummeted to 6.54 million, the lowest since 2020. January layoff announcements hit the highest level since 2008, adding to concerns ahead of next Wednesday’s monthly jobs report.

The bi-monthly Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) is underway, and all eyes are on indications of the future path of interest rates.

The decision, to be announced by Governor Sanjay Malhotra today, will come at a juncture of supportive economic signals, including the Union Budget’s growth-focused stance and the recently announced India-US trade deal. The policy rate is currently 5.25%, following a cumulative 125 basis-point reduction over the past year. We believe that the rate-cutting cycle may have run its course for now.

Nifty broke its three-session winning streak, shedding 133 points to close at 25642.

The Indian rupee strengthened 7 paise versus the dollar, closing at 90.36. It’s regaining ground after the Trade Minister confirmed a key deal timeline, erasing the “ambiguity discount” on the currency and bolstered by revived FII interest in domestic equities.

Nifty continues to consolidate near its 50 DEMA, currently placed at 25648. The trend remains bullish for Nifty, as it is placed above key moving averages. Nifty’s Key support lies in the 25,440–25,500 band, with resistances placed at 25,863 and 26,373.

Source: HSL Prime Daily, 06 Feb 2026