The US software ETF, $IGV, is down -15% in February alone, on track for its worst monthly performance since 2008, and is now testing its April 2025 lows, down -35% from its peak.

This comes as AI disruption fears are widening, with investors dumping stocks of any company seen at risk of being displaced by artificial intelligence.

Notably, Citrini Research published a report laying out hypothetical scenarios where AI disruption causes mass unemployment, declining consumer spending, and economic contraction by 2028, amplifying the selloff.

Meanwhile, the S&P 500 is down -1.0% and has been essentially flat for the last 4 months.

A broader pullback in the S&P 500 may be much closer than markets currently expect, especially once the 6,800 level is breached.