U.S. software and data services stocks steadied after days of sharp losses, as investors assessed whether rapidly advancing artificial intelligence tools are beginning to erode demand for traditional subscription-based software. Shares of ServiceNow and Salesforce posted modest gains, while Microsoft edged lower in premarket trading following heavy declines earlier in the week.
The stabilization followed a selloff that wiped more than $800 billion from the S&P 500 software and services index over six sessions, driven by fears that AI automation could disrupt long-established business models. European software stocks showed signs of recovery, with London Stock Exchange Group, RELX and Wolters Kluwer rebounding, while Indian IT exporters continued to lag after a steep drop a day earlier.
Investor anxiety had been heightened by new AI tools from Anthropic, which raised concerns about potential disruption to legal, data and professional services. Market participants said the recent volatility also reflects a broader rotation away from high-growth technology stocks toward more defensive sectors, as scrutiny intensifies over whether massive AI investments will deliver sufficient returns.
