DeepSeek effect on US stock market Nasdaq plunge 3% The stock of Nvidia, the top chipmaker for AI applications, plunged 11.7%, while a wider semiconductor index sank 6.5%.
DeepSeek effect on US stock market Nasdaq plunge 3%
DeepSeek effect on US stock market Nasdaq plunge 3% As shares of chipmaker Nvidia and other businesses that have profited from significant investments in AI technology were negatively impacted by the growing popularity of a low-cost Chinese AI model, the S&P 500 and Nasdaq fell to their lowest levels in more than a week on Monday.
DeepSeek effect on US stock market Nasdaq plunge 3% The Chinese startup DeepSeek challenged the notion that the expansion of AI will primarily drive demand for components like processors and data centers by introducing a free AI assistant that it claims utilizes less data and cheaper chips.
DeepSeek effect on US stock market Nasdaq plunge 3% Overtaking ChatGPT, DeepSeek’s AI Assistant rose to the top of the US App Store. Investors were concerned about whether DeepSeek’s inventions could upend the larger AI sector as a result of this discovery. Adam Sarhan, CEO of 50 Park Investments, stated that the market might start to reevaluate the full extent of its possible influence.
DeepSeek effect on US stock market Nasdaq plunge 3% “If it is something that can, then the market as a whole and all of these AI stocks will be re-priced.”
The stock of Nvidia, the top chipmaker for AI applications, plunged 11.7%, while a wider semiconductor index sank 6.5%.
DeepSeek effect on US stock market Nasdaq plunge 3% Technology stocks led the falls, down 4.5%, while eight of the 11 S&P 500 sectors were in the red. Alphabet, the parent company of Google, Microsoft, and Meta Platforms all saw losses ranging from 2.2% to 3.5%. In the meantime, there were notable declines of 7.2% and 8.9% for AI server makers Dell Technologies and Super Micro Computer, respectively.
DeepSeek effect on US stock market Nasdaq plunge 3% The energy demands of data centers driving AI development also hurt power companies, which are predicted to see a rise in demand. The two most severely impacted companies, Vistra and GE Vernova, each fell over 20%.
DeepSeek effect on US stock market Nasdaq plunge 3% Known as Wall Street’s “fear gauge,” the Cboe Volatility Index jumped 4.57 points to 19.42, its highest level since December 20.
By 09:43 a.m. ET, the Dow Jones Industrial Average had dropped 125.18 points, or 0.28%, to 44,299.07; the S&P 500 had lost 108.20 points, or 1.77%, to 5,993.04; and the Nasdaq Composite had dropped 606.43 points, or 3.04%, to 19,347.87. Defying the general trend, AT&T had risen 6.5% to a three-year high after its fourth-quarter wireless subscriber growth exceeded forecasts. Big Tech will continue to be in the spotlight as Microsoft, Meta, Apple, and Tesla—four of the “Magnificent 7” companies that drove the majority of last year’s gains—are scheduled to release quarterly results later this week.
As the United States and Colombia backed off from a potential trade war on Sunday after the White House announced that the South American country had consented to take military planes transporting deported migrants, international markets were also on edge.
DeepSeek effect on US stock market Nasdaq plunge 3% The December reading of the personal consumption expenditures (PCE) is set for Friday, and the U.S. Federal Reserve is projected to maintain its lending rate in its first interest-rate decision of the year, which is due on Wednesday.
DeepSeek effect on US stock market Nasdaq plunge 3% On the NYSE and the Nasdaq, declining issues outnumbered advancers by a ratio of 1.13 to 1 and 1.3 to 1, respectively.
DeepSeek effect on US stock market Nasdaq plunge 3% The Nasdaq Composite had 15 new highs and 40 new lows, while the S&P 500 achieved 16 new 52-week highs and no new lows.
What Bloomberg strategists say…
The Magnificent Seven have exceptionally high margin outlooks and premium valuations. In the long run, these earnings might be squeezed by cheaper AI.AI capital expenditures will probably influence technological perspectives and could obscure potentially strong outcomes.
DeepSeek effect on US stock market Nasdaq plunge 3% “It calls into question the massive resources that have been dedicated to AI,” said Nirgunan Tiruchelvam, head of consumer and internet at Singapore-based Aletheia Capital, of the DeepSeek product, which “is deeply problematic for the thesis that the significant capital expenditure and operating expenses that Silicon Valley has incurred is the most appropriate way to approach the AI trend.” The Nasdaq 100 is trading at 27 times estimated forward earnings, compared with its three-year average of 24.
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