S&P 500 tech sector poised to be Q1 2026's worst performer on AI fears, Iran war

Workday

31/03/2026 13:42

** The information and technology sector .SPLRCT on the S&P 500 .SPX is on track to becoming the worst-performing sector in Q1 2026, should current market trends hold

** As of Monday's close, the sector has plummeted 12.94% this quarter and is down 7.7% for March, poised for its largest monthly decline in a year

** In February, software stocks were battered by growing concerns about artificial intelligence disrupting existing business models

** Investor anxiety about stretched valuations in AI-related companies has further contributed to the sector's underperformance

** Higher yields due to Iran war-related inflation worries in March have also added to the impact

** The S&P 500 Software and Services index .SPLRCIS has fallen 25.8% so far in Q1, with software stocks including Workday WDAY.O, Applovin APP.O and Intuit INTU.O set to become the sector's worst performers, down about 35% to 40%

** However, memory stocks including Sandisk SNDK.O, Western Digital WDC.O and Seagate Technology STX.O are positioned to be the tech sector's top performers in Q1

(Reporting by Ragini Mathur in Bengaluru)

((Ragini.Mathur@thomsonreuters.com;))