The first tech wobble of 2026 revives AI bubble fears
Following a swell of AI bubble scepticism at the back end of 2025, this year’s first market wobble has arrived early, landing squarely on global tech stocks.
When Anthropic released a new AI tool designed to help in-house legal teams triage agreements and draft routine responses, the reaction trickled down through law firms straight into equity markets.
In London, Relx fell close to 11 per cent in a single session, wiping billions from its market value. Pearson dropped around four per cent. London Stock Exchange Group and Experian were down over seven per cent. And in Amsterdam, Wolters Kluwer slid almost nine per cent.
Anthropic’s announcement was carefully worded. The company claimed the tool “will not provide legal advice”, and that outputs should always be reviewed by professionals.
But for investors, the move showed that tasks long embedded in high-margin professional software systems were now firmly within reach of AI’s grip.
Unease has broadened since, with US stocks continuing to tumble. On Thursday, exactly one week after the fact, the S&P 500 closed down 1.57 per cent, the Dow Jones Industrial Average fell 1.34 per cent, and the Nasdaq slid 2.04 per cent.
The tech-heavy Nasdaq composite has now lost almost three per cent in 2026, after hitting record highs late last month.
Apple fell five per cent, Meta dropped 2.8 per cent, Amazon 2.3. In Asian markets, Softbank – heavily exposed to AI investments – also fell just over six per cent.
Back in Silicon Valley, Cisco took a 12.3 per cent tumble after warning that higher memory-chip prices would weigh on profitability. Logistics stocks also came under pressure amid concerns AI could disrupt freight brokerage models.
“Relx has a large presence in the legal space, and was in the teeth of the resulting storm”, said Dan Coatsworth, head of markets at AJ Bell.
“To what extent AI can disintermediate traditional data analytics and software firms is not yet clear, but a lot of investors weren’t sticking around to find out”.
Disruption risks
For much of the past two years, AI has been the market’s clear dominant growth story. Hyperscalers have committed hundreds of billions of dollars to data centres and chips.
Software groups have positioned themselves as beneficiaries, whilst data-heavy platforms have been seen as defensible thanks to intellectual property.
UBS this week downgraded the US tech sector, citing “pervasive uncertainty in the software industry”, and an expected moderation in infrastructure spend.
The bank claimed that Microsoft, Alphabet, Amazon, Meta and Oracle could all report capital expenditure of $700bn this year.
UBS expects capex growth to slow from current levels, “which could improve investor perceptions of those doing the spending, but is a potential negative for some companies in the enabling layer”.
It seems that not even strong results have not insulated firms from scrutiny. Microsoft reported quarterly revenue of $81.27bn, ahead of forecasts. Its Intelligent Cloud revenue rose 39 per cent year on year.
But shares still fell by almost ten peer cent, at one point down 12 per cent, marking the stock’s worst day since March 2020.
Jefferies analyst Brent Thill claimed the reaction reflected “concerns about Azure growth coming in close to expectations and the concentration of Microsoft’s backlog”.
Jason Borbora-Sheen, portfolio manager at Ninety One, described a market that was “trigger happy”, and reacting to every new “threat from AI”.
He also said that some investors could be de-risking ahead of inflation data. Elsewhere, the 10-year Treasury yield has fallen to 4.10 per cent, its lowest level this year, as investors sought haven assets.
Demand at a $25bn 30-year bond auction was strong, with primary dealers taking the lowest share on record, according to BMO Capital Markets.
However, gold fell 3.2 per cent. “The equity market decline has triggered gold liquidation to raise cash”, said James Steel, HSBC analyst.
Volatily becomes the variable
Earnings season is still expected to show signs of success. According to Bloomberg Intelligence, S&P 500 earnings are expected to rise 8.4 per cent in the fourth quarter, marking a tenth consecutive quarter of year on year growth.
What’s more, 76 per cent of firms reporting so far have beaten expectations. However, these results land amid a shifting market backdrop, with the UK experiencing an eight per cent net loss in jobs over the past year thanks to AI, according to Morgan Stanley.
London mayor Sadiq Khan has warned that white-collar jobs across law, finance and marketing sit “at the sharpest edge of change”.
Anthropic co-founder and chief executive Dario Amodei wrote lsat month that AI development will “test who we are as a species”.
For markets, that question is applied to a narrower lens, questioning which business models are insulated, and which are exposed.
The first tech sell-off of the year has only been a wobble. The FTSE 100 has continued to make ground, buoyed by strength outside the tech sector.
Meta surged over 10 per cent on strong ad results, even as it raised capital expenditure guidance to between $115bn and $135bn.
But volatility remains close at hand, and AI has been firmly dubbed as a source of competitive risk, reigniting previous fears of a so-called bubble.