Dow Jones Futures Dip Amid Renewed AI Concerns; Block, Netflix, and Applied Optoelectronics Show Gains
By Ed Carson | Updated 11:05 PM ET, February 26, 2026
Dow Jones futures declined modestly overnight, signaling investor caution as fears surrounding artificial intelligence (AI) disruption resurfaced. The broader market followed suit, with S&P 500 and Nasdaq futures also retreating. Nevertheless, certain stocks like Block, Netflix, and Applied Optoelectronics bucked the trend with notable jumps.
Market Overview: Tech Stocks Retreat Despite Nvidia Strength
Following Nvidia’s blockbuster fourth-quarter earnings—reporting an 82% surge in profits and 73% revenue growth to $68.1 billion for the quarter ending in January—the market reaction was surprisingly subdued. Nvidia shares dropped 5.5%, closing near session lows and dipping below their key 50-day moving average, raising questions about investor sentiment despite the company’s strong fundamentals.
Major chipmakers including Advanced Micro Devices (AMD), Broadcom (AVGO), and Taiwan Semiconductor Manufacturing Company (TSM) also faced declines, alongside many names within the AI infrastructure sector. Taiwan Semiconductor notably fell nearly 3% after hitting record highs the previous session.
The overall tech sell-off continued the day after tech stocks had rallied into Nvidia’s earnings announcement, illustrating a market lesson: It’s often the response to news—not the news itself—that moves prices.
Sector and ETF Movements
- Dow Jones futures dropped 0.5% relative to fair value.
- S&P 500 futures declined 0.3%, while Nasdaq 100 futures slipped 0.2%.
- The small-cap Russell 2000 index gained 0.5%, rebounding from its 21-day moving average.
- The Invesco S&P 500 Equal Weight ETF (RSP) closed at a new high, up 0.6%.
- The VanEck Vectors Semiconductor ETF (SMH), heavily concentrated with Nvidia and other chipmakers, tumbled 3.3%.
- Software stocks, impacted by renewed AI disruption fears, faltered late in the session.
- Block (formerly Square), the digital payments company, experienced selling pressure following an announcement to cut 40% of its workforce, citing AI impacts.
- Among sectors, financials (XLF) rose 1.2%, industrials (XLI) climbed 0.6%, and homebuilders (XHB) gained 1.05%.
Notable Stock Movements and Earnings Reports
Gainers:
- Netflix (NFLX) jumped after deciding to cease pursuit of Warner Bros. assets, following Warner Bros.’ preference for a raised bid from Paramount Skydance.
- Applied Optoelectronics (AAOI) surged overnight.
- Medical apparel maker Figs (FIGS) jumped and may present a buying opportunity on Friday.
- ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) saw substantial gains of 1.45% and 4.6%, respectively.
Decliners:
- Intuit (INTU), Zscaler (ZS), and Duolingo (DUOL) declined significantly after releasing earnings.
- Monster Beverage (MNST), CoreWeave (CRWV), Terawulf (WULF), Rocket Lab (RKLB), and MP Materials (MP) saw slight to solid declines.
Treasury and Commodities Update
The 10-year Treasury yield eased by three basis points to 4.02%, marking its lowest level in nearly three months. U.S. crude oil futures moderated by 0.3% to $65.21 per barrel amid ongoing U.S.-Iran nuclear talks, which are set to resume next week despite significant outstanding differences.
What Investors Should Consider Now
Given the current volatile and bifurcated market environment, investors are advised to remain cautious and nimble. While buying opportunities persist—particularly in sectors like regional banks, travel, aerospace, retail, trucking, and biotech—some AI-related trades appear to be pausing. Memory chip stocks such as Micron Technology (MU) could present new opportunities if the AI sector cools for an extended period.
Successful investment in the near term will likely depend on active monitoring and quick responses to shifting market conditions. Building watchlists and staying engaged but patient is the recommended approach.
Stay Informed
For ongoing market insights and analysis of leading stocks and sectors, investors are encouraged to follow Investor’s Business Daily updates and expert commentary, including on platforms like Threads and X/Twitter at @IBD_ECarson.
This article incorporates data and analysis from Investor’s Business Daily as of February 26, 2026.