Software stocks and the broader Nasdaq Composite rose more than 1% as dip-buyers rushed into the market after days of intense selling.

The immediate spark for the Friday sell-off was the Amazon fourth-quarter earnings report. The e-commerce giant projected that its capital expenditures would reach $200 billion in 2026. CNBC reported that Amazon's Capex figure was $50 billion higher than expected, and the stock market reacted accordingly.

The prospect of disruptions from artificial intelligence has hung over the economy for years. But this week advances in software tools precipitated a sell-off on Wall Street.

Live Updates Tech Gains Buoy Nasdaq Composite Higher 1 hour ago Live Nvidia (Nasdaq: NVDA) stock has begun to rally, climbing 7% higher and helping to alleviate fears of the AI bubble in the markets.

SaaS companies took major hits: Microsoft closed down 2.87%, SAP was down 3.29% this morning on the German market, Salesforce lost 6.85% yesterday and was further down in overnight trading, ServiceNow was down 6.97% yesterday and was marginally lower overnight, also.

It’s also widened to include the industry’s Wall Street backers, from lenders to private equity owners for whom software firms have been popular targets. More than $17.7 billion of US tech company loans in a Bloomberg index dropped to distressed trading levels during the past four weeks.

The S&P 500 rose 1.97%, its best day since May as it rebounded from a week of dramatic selling, triggered by fears of how the AI boom will change the economy.