Nasdaq Tumbles 350 Points Amid Decline In Software Stocks: Investor Sentiment Declines, Greed Index In 'Fear' Zone

The CNN Money Fear and Greed index showed a decline in the overall market sentiment, while the index remained in the “Fear” zone on Wednesday.

U.S. stocks settled mixed on Wednesday, with the Nasdaq Composite falling around 350 points during the session as investors continued to rotate aggressively out of long-duration growth and into energy and materials.

The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) dipped for a seventh straight session and fell back to levels last seen during the April 2025 tariff shock.

In earnings, Advanced Micro Devices Inc. (NASDAQ:AMD) shares fell more than 17% on Wednesday after the company reported fourth-quarter financial results. Eli Lilly and Co. (NYSE:LLY) stock jumped over 10% after the company released better-than-expected fourth-quarter earnings and issued fiscal 2026 guidance. Uber Technologies Inc. (NYSE:UBER) stock fell more than 5% after the company reported its fiscal fourth-quarter 2025 results.

On the economic data front, the ISM Services PMI came in at 53.8 in January, unchanged from the revised reading of 53.8 in December and compared to market estimates of 53.5. The S&P Global composite PMI climbed to 53.0 in January from the preliminary level of 52.8 and up from December’s reading of 52.7.

Most sectors on the S&P 500 closed on a positive note, with energy, materials and real estate stocks recording the biggest gains on Wednesday. However, information technology and communication services stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by around 260 points to 49,501.30 on Wednesday. The S&P 500 fell 0.51% to 6,882.72, while the Nasdaq Composite dipped 1.51% at 22,904.58 during Wednesday's session.

Investors are awaiting earnings results Bristol-Myers Squibb Co. (NYSE:BMY), ConocoPhillips (NYSE:COP) and Amazon.com Inc. (NASDAQ:AMZN) today.

What Is CNN Business Fear & Greed Index?

At a current reading of 40.7, the index remained in the “Fear” zone on Wednesday, versus a prior reading of 44.5.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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