A new AI productivity suite caused a stir in global markets, pushing stocks of software and analytics companies down in the US and Europe amid concerns that AI could disrupt their revenue models.

What happened?

Investors reacted sharply to the launch of Anthropic’s AI productivity tools for its Claude Cowork platform, which can automate regulatory work and other corporate tasks, the Financial Times reports. The market took the launch as a signal that companies whose business models rely on professional services and data analytics could see their work reliably automated by AI tools soon.

US tech stocks led the sell-off, with Nasdaq falling 1.4% and S&P 500 shedding 0.8%. The JPMorgan index tracking US software stocks also lost 7%, taking its YTD decline to 18%.

The rout was fueled by fears that even market heavyweights like Microsoft, Nvidia, and Oracle could be vulnerable. Nvidia fell 2.8%, Microsoft lost 2.9%, and Oracle dropped 3.4% as investors digested the implications of AI-driven efficiency gains for corporate clients. “All the software players are clients of the hyperscalers,” such as Amazon, Microsoft, and Alphabet, and these companies stand to be affected by the disruption, Jones Trading’s Mike O’Rourke told the salmon-colored paper.

There’s also the concern about rising costs in AI hardware. AMD shares fell 8% despite beating revenue estimates and forecasting USD 9.8 bn in sales for the quarter. The company was “entering 2026 with strong momentum,” led by “rapid scaling” of its data center business, CEO Lisa Su said. However, soaring memory chip prices have raised worries over margins, affecting not just AMD but also Intel and Apple.

Europe and Asia were not spared: The selloff also extended to European stocks, with the LSEG losing 12.8% and advertising firms such as Publicis and WPP seeing declines of 9% and 12%. Over in Asia, Indian IT companies such as Tata Consultancy Services and Infosys lost 6-7.1%, while Xero Ltd in Australia fell 16% in Sydney trading, Bloomberg reports.

What’s next?

The sell-off is being framed as a moment for the market to separate AI winners from losers, and investors are weighing their next moves carefully as software and analytics firms face both growth prospects and potential disruptions from AI. “Our sense from investor discussions is that general appetite to step in remains generally low,”JP Morgan analyst Toby Ogg told Reuters.

MARKETS THIS MORNING-

The tech selloff is continuing to echo through markets, as investors ditch their tech stocks for cyclical stocks. Asia-Pacific Indices opened in the red this morning, led by South Korea’s Kopsi.

EGX30

49,632

+1.3% (YTD: +18.7%)

USD (CBE)

Buy 46.86

Sell 46.99

USD (CIB)

Buy 46.85

Sell 46.95

Interest rates (CBE)

20.00% deposit

21.00% lending

Tadawul

11,341

+0.1% (YTD: +8.1%)

ADX

10,542

+0.7% (YTD: +5.5%)

DFM

6,662

+0.7% (YTD: +10.2%)

S&P 500

6,883

-0.5% (YTD: -0.5%)

FTSE 100

10,402

+0.9% (YTD: +4.7%)

Euro Stoxx 50

5,970

-0.4% (YTD: +3.1%)

Brent crude

USD 69.46

+3.2%

Natural gas (Nymex)

USD 3.47

+0.1%

Gold

USD 5,028

+1.6%

BTC

USD 72,992

-3.6% (YTD: -16.6%)

S&P Egypt Sovereign Bond Index

1,016

+0.1% (YTD: +2.3%)

S&P MENA Bond & Sukuk

151.49

+0.1% (YTD: -0.3%)

VIX (Volatility Index)

18.86

+4.8% (YTD: +27.8%)

THE CLOSING BELL-

The EGX30 rose 1.3% at yesterday’s close on turnover of EGP 8.8 bn (54.3% above the 90-day average). International investors were the sole net buyers. The index is up 18.7% YTD.

In the green: Ibnsina Pharma (+7.2%), Kima (+5.0%), and Juhayna (+3.3%).

In the red: Palm Hills Developments (-2.1%), Abu Qir Fertilizers (-1.7%), and Heliopolis Housing (-1.4%).

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