Big Money Exits Nasdaq as AI Disruption Fears Trigger Longest Selloff Since 2022

TLDR

• Asset managers reduced Nasdaq 100 futures net-long positions by over $7 billion from mid-January to Feb. 10, the largest cut since last spring
• Short positions in Nasdaq 100 futures increased by roughly $3 billion while long positions were trimmed
• The Nasdaq Composite posted its fifth straight weekly decline on Friday, marking its longest losing streak since 2022
• Tech stocks led US futures lower on Tuesday with Nasdaq 100 futures down 0.6% as AI disruption fears continue
• Morgan Stanley strategists view the current volatility as typical of major investment cycles and maintain confidence in AI infrastructure investments

Asset managers have pulled back from Nasdaq 100 futures in the largest position reduction since spring 2025. Data from the Commodity Futures Trading Commission shows net-long exposure dropped by more than $7 billion between mid-January and February 10.

The positioning shift involves changes on both sides of the trade. Short positions grew by approximately $3 billion during this period. Long positions were steadily reduced as investors reassessed their technology exposure.

The move comes as artificial intelligence disruption dominates conversations across financial markets. Investors are evaluating which business models will benefit from AI and which face structural challenges. This reassessment extends beyond technology into other sectors as well.

US stock futures pointed to more losses on Tuesday morning. S&P 500 futures dropped 0.3% while Nasdaq 100 futures fell 0.6%. Dow Jones Industrial Average futures declined 0.1%.

The Nasdaq Composite completed its fifth consecutive weekly decline on Friday. This represents the index’s longest losing streak since 2022. The Dow and S&P 500 have fallen in four of the past five weeks.

Market Concerns Spread Across Industries

Worries about AI’s disruptive potential have spread to multiple sectors. Wealth management, transportation, and logistics companies are all facing scrutiny. Investors are questioning how automation and AI capabilities will reshape these industries.

The repositioning creates conditions for sharp price movements in either direction. Short squeezes could occur if market sentiment improves. Conversely, the market remains vulnerable to accelerated selling if negative momentum builds.

Friday’s cooler-than-expected January inflation report provided some relief. Consumer price index data came in below estimates. However, concerns about economic growth and sector disruption overshadowed the positive inflation news.

Morgan Stanley Maintains Positive View

Morgan Stanley strategists led by Michael Wilson describe the recent volatility as normal for a major investment cycle. The team notes contradictions in some AI-related fears. Markets face dual concerns about underperformance in service-oriented stocks and worries about AI capital spending and automation’s impact on employment.

The strategists characterize AI as highly disruptive but believe this strengthens the case for infrastructure and compute investments. They suggest fears about job losses could translate into efficiency gains and margin expansion. Realizing these benefits will require expanded application development and enterprise integration.

Wilson’s team says investor anxiety is clearly visible but considers higher volatility and dispersion typical as markets assess winners and losers. Capital is rotating toward structural and cyclical beneficiaries. Software companies with long-dated cash flows face pressure as investors look ahead multiple steps.

The strategists acknowledge that faster-than-expected advances in AI model capabilities pose a risk. This could amplify disruption and reshape sector leadership more quickly than their base case anticipates.

Investors will receive more economic data this week. The Personal Consumption Expenditures index is scheduled for release Friday. Minutes from the Federal Reserve’s latest policy meeting are due Wednesday.

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