AI disruption looms over markets with US jobs data on tap

By Lewis Krauskopf

NEW YORK, Feb 27 (Reuters) - Prospects for artificial intelligence to disrupt business sectors should keep the U.S. stock market on edge in the coming week, as Wall Street looks for more insight into how the emerging technology will reverberate through the economy.

The monthly U.S. jobs report headlines economic data ‌due next week, while major semiconductor player Broadcom is among the remaining reports that will close out the fourth-quarter earnings season.

The disruptive potential of AI has consumed ‌investors in recent weeks, with shares in industries such as software, wealth management and real estate services pummeled by concerns about business upheaval.

"There continues to be this ... back and forth about who might be the victim and those ​that will actually emerge winners because they are harnessing AI as opposed to being replaced by it," said Kristina Hooper, chief market strategist at Man Group.

"There is very little definitive right now about that, and so I think that will continue to be a concern."

Stock prices in areas such as software remain acutely sensitive to AI-related developments. AI bellwether Nvidia's highly anticipated quarterly report failed to calm nerves, with the semiconductor giant's shares falling over 5% on Thursday and weighing on the technology sector. Investors are concerned about whether Nvidia's "hyperscaler" customers will garner sufficient returns to justify their ‌massive spending on data centers and other infrastructure.

Despite the tech sector's ⁠struggles, gains this year in other areas such as industrials and consumer staples have helped support major equity indexes.

Weakness in tech and financial shares dragged on major averages on Friday, with the S&P 500 and Nasdaq Composite in February both posting their biggest monthly percentage declines in about ⁠a year.

The benchmark S&P 500 was up 0.5% so far in 2026 as of Friday.

"The U.S. equity market is sort of in its late cycle, trying to find the winners and losers of this new disruptive technology and pretty much treading water," said John Velis, Americas macro strategist at BNY.

WILL FEBRUARY JOBS BACK JANUARY'S STRENGTH?

The U.S. jobs report for February, due on March 6, is expected to show ​an ​increase of 60,000 jobs, according to a Reuters poll. It comes after January's surprisingly robust report, with an ​increase of 130,000 jobs and the unemployment rate falling to 4.3%.

The ‌January report allayed worries about a weakening labor market, but "the concern is that January is a one-off," said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest Wealth Management.