Why did the S&P 500 drop if earnings were mostly fine?

Positioning and guidance mattered more than beats. Investors focused on heavy AI spending plans, which may slow buybacks and pressure near-term margins. Higher yields lifted discount rates, hurting long-duration growth. With crowded trades in mega-cap tech, small negative surprises created larger moves. That set off a broader risk reset that also hit the ASX.

How does a Nasdaq fall affect Australian shares?

A Nasdaq fall often hits Australian Information Technology and healthcare the next day because many funds trade sector baskets and futures across time zones. A stronger USD can also tighten global financial conditions. The result is an ASX sell-off led by growth names, while defensives and income stocks tend to hold up better on a relative basis.

What should I watch on the S&P 500 to manage risk?

Track the 50-day and 200-day moving averages, market breadth, and volume on rebounds. Improving breadth and stronger up-volume suggest healthier rallies. Also monitor credit spreads and the USD. If spreads narrow and the dollar cools, equities often stabilize. Use predefined stop levels and staged entries so one bad day does not derail your plan.

Is it safer to move fully to cash after a sharp sell-off?

Moving fully to cash risks missing fast rebounds. We prefer balance. Keep a cash buffer for opportunities, hedge concentrated positions, and upgrade into profitable leaders on weakness. If the S&P 500 holds key averages and earnings revisions stabilise, selective risk can work. If conditions worsen, you still have cash and hedges to protect capital.

Global Market Insights

^GSPC Today, February 07: Tech Rout Extends as S&P 500 Slides 1.2%

ByHuzaifa Zahoor February 7, 2026February 7, 2026

The S&P 500 fell about 1.2% overnight as the tech stocks slump widened and risk appetite cooled. Futures signalled more pressure after the Nasdaq fall, with AI spend jitters back in focus. The S&P 500 (^GSPC) slide stoked a sharp ASX sell-off in morning trade, pushing investors toward cash and defensives. We break down what drove the move, how it hit local sectors, and steps to manage near-term swings without losing sight of longer-term goals.