US stocks tumbled Thursday as investors fled megacap tech shares ahead of Friday's crucial inflation data. The Dow Jones Industrial Average (^DJI) dropped 1.17% or over 500 points, while the S&P 500 (^GSPC) fell 1.2% and the Nasdaq Composite (^IXIC) plunged nearly 2%.

Tech giants led the decline, with Nvidia (NVDA) falling 0.34%, Meta (META) dropping 2.36%, and Microsoft (MSFT) declining 0.90%. Cisco Systems (CSCO) shares crashed over 11% after warning of weak profit margins despite rising sales from Big Tech's AI infrastructure spending. The selloff reflects growing investor anxiety about AI disruption across software sectors.

The market rotation comes as January's strong jobs report dampens expectations for Federal Reserve rate cuts. Nonfarm payrolls doubled economists' forecasts with 130,000 jobs added, while the unemployment rate fell to 4.3%. With inflation data looming and labor markets showing resilience, traders are pricing out near-term rate cut scenarios that have supported equity gains throughout 2025.