A sweeping AI-driven selloff batters U.S. software, finance, insurance, real estate and logistics stocks as investors fear rapid automation could upend traditional business models.
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| Investors dump shares across U.S. industries as artificial intelligence fears trigger a broad market rout, with software, insurers and transport stocks leading declines. Image: CH |
Tech Desk — February 14, 2026:
Wall Street’s anxiety over artificial intelligence has snowballed into one of the broadest sector selloffs in recent years, as investors race to reassess which industries could be most vulnerable to automation.
What began as a sharp correction in high-flying software stocks has metastasized into a sweeping “AI scare trade,” hammering financial services, insurance, real estate and even trucking. The scale and speed of the retreat underscore how rapidly AI has shifted from growth catalyst to perceived existential threat in equity markets.
The rout first gripped the S&P 500 Software & Services Index, which has shed roughly $2 trillion in market value since its October peak. Half those losses came in just two weeks, as investors questioned whether generative AI tools could render traditional subscription-based enterprise software obsolete.
Within the Nasdaq-100, Atlassian has plunged 47% this year, while Intuit is down 40% and Workday has lost about a third of its value. Salesforce has tumbled roughly 30% in 2026, with Adobe and CrowdStrike also posting double-digit declines.
The sudden reversal reflects fears that AI-native platforms could bypass established enterprise ecosystems. Yet some portfolio managers argue the market may be pricing in disruption faster than it can realistically occur, given the stickiness of enterprise contracts and long integration cycles.
The software slump has also hit alternative asset managers exposed to leveraged loans in the sector. Firms including Ares, Blackstone, Blue Owl, Apollo, TPG and KKR have fallen between 13% and 24% this year.
Estimates from BNP Paribas suggest about one-fifth of private credit is tied to software companies, raising concerns about loan performance if earnings deteriorate. The ripple effect highlights how sector-specific fear can cascade through the broader financial system.
Investor alarm intensified after wealth manager Altruist introduced AI-enabled tax planning features, fueling speculation that automation could undercut brokerages and financial data providers.
Shares of LPL Financial, Raymond James and Charles Schwab dropped more than 7% in a single session. Meanwhile, S&P Global has slumped more than 25% this month after issuing a downbeat 2026 outlook, marking its worst monthly performance since 2009. Moody’s, FactSet and MSCI have also retreated sharply.
Nasdaq-listed Thomson Reuters touched a near five-year low, reflecting concerns that generative AI tools could erode demand for traditional legal research and analytics services.
The underlying worry: AI may compress margins in industries built on information asymmetry and advisory expertise.
Commercial real estate brokerages were swept into the selloff as investors rotated away from high-fee, labor-intensive business models perceived as automation targets.
CBRE Group and Jones Lang LaSalle sank roughly 12% in one trading session, while Cushman & Wakefield fell nearly 14%. CoStar Group, owner of major property listing platforms, also declined.
Some analysts contend that fears may be overstated, pointing to the fragmented structure of commercial real estate markets and the complex, relationship-driven nature of transactions. Still, elevated valuations left little room for sentiment-driven shocks.
Insurance stocks recorded their steepest single-day decline since October after online platform Insurify launched an AI-powered comparison tool built on ChatGPT.
The S&P 500 Insurance Index dropped 3.9%, as investors anticipated margin pressure in commoditized products such as auto and home policies.
Willis Towers Watson has shed 15% this week, its worst stretch since the pandemic-driven selloff of March 2020. Aon and Arthur J. Gallagher have also posted significant weekly losses.
Analysts suggest a potential bifurcation: simpler, price-sensitive products may face meaningful disruption, while complex commercial lines could leverage AI to enhance underwriting rather than be displaced by it.
Even transportation stocks were not spared. Shares of Landstar System and C.H. Robinson tumbled after AI-focused logistics firm Algorhythm Holdings reported that its SemiCab unit increased freight volumes by 300% to 400% without expanding headcount.
The announcement pushed the Dow Jones Transportation Average down 4.4% in one session.
Some analysts argue the reaction was disconnected from fundamentals, noting that physical networks and proprietary freight data remain durable competitive advantages in logistics.
The breadth of the AI scare trade suggests markets are repricing more than near-term earnings—they are reevaluating the long-term viability of entire business models.
For now, fear is moving faster than financial results. Whether this marks a structural turning point or a sentiment-driven overreaction may depend on how quickly AI translates from promise into measurable revenue disruption.
Until that becomes clearer, investors appear poised to keep asking the same question: Who’s next?