The software sector is experiencing a significant pre-market downturn, with the IGV ETF down over 3%. The sell-off is primarily driven by disappointing earnings and guidance from several key software companies. AppLovin (APP) and Datadog (DDOG) both saw their shares fall sharply after their quarterly reports. This has created a negative sentiment that is impacting other major software names like Salesforce (CRM) and Adobe (ADBE), which are also trading lower. The weakness in software is also linked to a broader cooling of investor enthusiasm for AI-related stocks.