Stock Market Plunge to Begin February

Today’s additional plunge in the major indexes is a sure sign that negative signals that were there before are starting to hit home with business owners and investors.

Beginning on Tuesday, a riskoff sentiment began but didn’t really take hold until Wednesday, while the plunge came today.
It looks like a crisis of faith is crystalizing and everyone is feeling it. Tech stocks took a beating with crypto stocks being jettisoned first.

AI companies got hit hard too including Microsoft, Nebius Group, Adobe, Seagate, Amazon, Tesla, AMD, Nvidia, Google, Palantir. Tech got hit because of its excessive valuations and a lack of profitability. Investors are becoming impatient with AI stocks performance and timelines for returns.

Note for today, Friday Feb 6: Markets have rebounded from the dip, with small cap stocks such as Bitfarms leading the way up 25% so far.  It appears the selloff mainly because of profit-taking and worries around tech valuations and today,investors stepped in to buy as prices dipped, pushing the indexes well up today (Dow up 2.16%, S&P up 1.69%, NASDAQ up 1.89% and the Russell up 3.29%).  There’s still concern that this might be a dead cat bounce. A lack of really solid positive news makes it likely the sell off will continue throughout February.

Jobs Reports Might Have Jolted Investors

It could be there is little to inspire investors right now, so any additional negative news might tip the market.  And the jobs market offered disturbing news, as U.S. job openings fell to the lowest level in more than five years, signaling a weakening labor market. Only 22,000 jobs were created last month. 108,435 layoffs were announced for January 2026, the highest since 2009, and up 118% from the same period last year and up 205% from December 2025. And only 5,306 new hires were reported, the lowest since 2009 showing a big change in employers outlook. Initial claims for ‌state unemployment benefits rose 22,000 to a seasonally adjusted 231,000 for the week ended January 31, according to the US ‌Labor Department.

In response, the Nasdaq composite dropped 1.58%, while the Dow fell 1.22%, and the S&P500 declined 1.24%. The much vaunted Russell2000 as the recipient of the small cap rotation saw investors turn back the other way, but falling the most at 1.78%.

Keep in mind the lofty heights the stock market has risen to, along with the crypto and gold markets and it’s easy to see why selloffs occur. Once sentiment sags without big financial media support and government support, markets can plummet in the gap. Yet, these correction events actually help release “doubt” and leave room for strengthened conviction for the long term. (in retrospect: Thursday’s drop was small, and Friday’s response was a sign of strong conviction).

Bitcoin is also plummeting to 64, 457 a coin, down 15,000 over the past two days and that is sending bit coin mining companies into a tailspin. It’s making companies such as Bitfarms look like geniuses as Bitcoin mining becomes unprofitable. Bitfarms sold off its cryptomining operations and assets to focus solely on AI datacenters and power generation.

Most of the biggest losers on the day were cryptocurrency mining companies.

Some experts saw the selloff as a rejection of software, with the implication that AI systems don’t need software.

Gold closed down 89.9 to 4,799.60 per ounce bit is down only $40.80 per ounce in the past 5 days. Other commodities saw a big drop even though Cocau and Coffee rose.

The biggest losing stocks today by percentage were:

• CleanSpark (CLSK) (AI Power Solutions) down 19.13%
• Estee Lauder (EL) (Beauty) down 19.19%
• Hut8 (HUT) (AI datacenters) down 17.89%
• (MARA) Mara Holdings (Cryptocurrency Mining) down 18.72%
• UHaul Holding (UHAL) (moving) down 14.53%
• (BKNG) Booking Holdings (Travel) down 3.55%
• BridgeBio Pharma (BBIO) (Pharma) down 15.24%
• IBM (IBM) (technology) fell 6.5%
• (AZO) AutoZone (Retail) down 3.1%
• DJT (Trump Media & Technology) (Media) down 12.53%

Is This Selloff Going to Continue?

The question for investors is the bleeding in this downturn finished? Or will this turn into one of the best buy the dip opportunities ever? With many experts citing the US economy’s resilience, is this just another earth tremor as the US repatriates its wealth, productivity and export power?

Normally, investors are immediately fed some positive news from the financial media, and the markets correct themselves quickly, but this drop is fortified by bad news from the job market. Experts have warned of volatility in the stock market, but is this drop a warning of something more significant?

Truflation’s report shows real CPI inflation is falling strongly although FED reports show it up at 2.8%.  Easing inflation would make us conclude that the next FED chair would be okay with central bank rate cuts. And a rate cut would have an immense boosting effect for most US businesses and stocks. It’s the big signal most investors and small business owners have been waiting a long time to come to fruition.

The best bet, is this is just a selloff where some are unloading their wealth for wiser investors to capitalize on.

See more on the 2026 stock market forecast, Dow Jones predictions, and which AI stocks might be the best to buy.