Investing.com -- Software stocks are notably weaker again on Tuesday, and all signs point to Claude's latest release, which allows users' computers to run tasks in their browsers, as the culprit. However, according to one market watcher, six other factors could be weighing on the sector today as well.

iShares Expanded Tech-Software Sector ETF (NYSE: IGV) is down 4.2% at the time of this writing. Across the group, Atlassian is down 8.6%, Salesforce is down 6%, Adobe is down 4%, SAP is down 4%, ServiceNow is down 5%, and Microsoft is down 3%, among others.

Mizuho Managing Director, Equity Trading, Daniel O'Regan said, while there isn't one clear answer to today's weakness, a host of small factors are weighing in, including Claude's latest release.

In addition, O'Regan points to a negative note from a boutique research firm on Atlassian. In the report, the firm said the company's partners are tracking slightly below plan for the quarter, while the outlook calls for a deceleration in growth in CY26.

He also points to an article by David George, General Partner and Head Growth Fund at Andreessen Horowitz - 'There are only two paths left for software'. In the article, George said the first path is to accelerate revenue growth by more than 10 percentage points year over year through the development of genuinely new AI-native products over the next 12 to 18 months. The second is to rebuild the business to achieve true operating margins above 40%, ideally reaching 50%, inclusive of stock-based compensation.

O'Regan also points to a report on Anthropic usage that came out overnight. The report shows that experienced, "AI-fluent" users consistently achieve better outcomes than novices, creating a growing productivity and income gap within the same roles.

Another factor weighing on software today, according to O'Regan, is higher interest rates, with the 10-year yield at 8-month highs.

In addition, one stock in the IGV index is getting crushed 20%. The stock in question is Circle, and O'Regan said it shouldn't even be in the index as it is a fintech that issues a stablecoin. The stock is weak amid concerns about a stablecoin bill. According to a report from Crypto in America, citing an internal stakeholder email, the proposal would prohibit platforms from offering yield "directly or indirectly" for holding a stablecoin or in a manner resembling a bank deposit.

Lastly, the market watcher points to news that recent Amazon.com AWS layoffs are related to an update in AI agent usage. AWS is developing AI to automate functions in its sales, business development, and other groups where it recently laid off employees, The Information reported.