Why Stock Market Fell Today: AI Shock, IT Crash, Oil Surge & Expiry Volatility

On Tuesday, February 24, 2026, global equity markets, including India’s benchmark indices, witnessed a sharp sell-off with major indices trading significantly lower. In India, the Nifty 50 and BSE Sensex declined over 1 per cent. The BSE Sensex fell by more than 1,100 points or 1.4 per cent below the 82,200 mark, while the Nifty 50 dropped over 300 points or 1.3 per cent below 25,400, dragged down mainly by technology stocks, weak global cues and macroeconomic concerns.

In the United States, Wall Street ended sharply lower on Monday, with key indices such as the S&P 500 and Nasdaq falling more than 1 per cent as risk-off sentiment intensified among investors.

Here are the five key reasons behind the downturn:

1. AI Shock: Anthropic’s Claude Agent and the Citrini Research Hypothesis

The biggest trigger came from global technology disruption fears. The sell-off began after Anthropic unveiled its Claude Cowork Agent, an advanced artificial intelligence system capable of autonomous coding and project management. The launch intensified concerns that AI could rapidly replace traditional software services work.

Soon after, a viral report titled “The 2028 Global Intelligence Crisis” by Citrini Research amplified those fears. The report presents a structural hypothesis that threatens the foundation of India’s outsourcing model, labour arbitrage.

For decades, Indian IT giants such as Tata Consultancy Services, Infosys and Wipro have thrived by offering high-quality engineering talent at lower costs than Western peers. However, Citrini argues that “agentic AI” neutralises this advantage as the marginal cost of AI coding agents has collapsed to nearly the cost of electricity.

The report predicts contract cancellations could accelerate through 2027, the services trade surplus may evaporate, 5 per cent of white-collar workers could be displaced within 18 months, and the rupee could fall up to 18 per cent in four months. It also suggests that by Q1 2028, the International Monetary Fund may begin preliminary discussions with India, drawing parallels to the 1991 macroeconomic crisis when India sought IMF assistance.

These structural concerns triggered a global tech sell-off. U.S. technology stocks fell sharply, and legacy firms such as IBM declined 13 per cent amid worries that AI tools could replace traditional coding ecosystems.

2. Highest IT Contribution to the Nifty 50

The Indian market decline had a strong sectoral bias. The Nifty IT index fell over 5 per cent, far outpacing losses in most other sectors. IT heavyweight stocks have remained under pressure this month, reflecting structural concerns tied to AI disruption and slowing global technology demand.

With the IT sector contributing 10.83 per cent to the Nifty 50, weakness in Large-Cap IT stocks significantly pulled down the broader index, amplifying volatility and deepening the fall.

3. Geopolitical Risk: U.S.-Iran Tensions Push Crude Higher

Markets also reacted to renewed geopolitical tensions in the Middle East, particularly between the U.S. and Iran. Crude oil prices climbed toward seven-month highs above USD 67 per barrel on fears that diplomatic strains and escalating tensions could disrupt supply.

Rising oil prices dampen investor sentiment as they increase concerns about inflation, higher corporate input costs and slower growth, especially for import-dependent economies like India. When geopolitical tensions escalate and oil prices rise, global investors tend to adopt a risk-off approach, reducing exposure to equities and increasing allocations to safer assets such as bonds and gold.

4. Nifty F&O Expiry Volatility

Tuesday also marked the monthly Futures and Options expiry for the NSE Nifty 50. Derivatives expiry sessions often heighten short-term volatility as traders adjust or close positions, leading to elevated Intraday volumes and sharp price swings.

The rolling over of derivative positions can intensify both buying and selling pressure depending on hedging flows. Combined with negative macro triggers and sector-specific weakness, expiry dynamics further amplified market volatility.

5. Pre-GDP Release Nervousness and Fragile Global Sentiment

Investors are also positioning cautiously ahead of India’s quarterly GDP data scheduled for release on Friday, February 27. Major economic data releases typically lead to defensive positioning as traders avoid aggressive bets ahead of potentially market-moving numbers.

If GDP data comes in weaker than expected, it could signal slower corporate growth, earnings pressure and softer consumption trends, increasing downside risks.

At the same time, global sentiment remains fragile. Recent U.S. market sell-offs linked to AI fears and tariff uncertainty have contributed to broader risk-off positioning. Mixed cues across Asian markets reflect uncertain investor confidence, creating a cautious macro environment that continues to weigh on equities.

Disclaimer: The article is for informational purposes only and not investment advice.