Stock market today: Nasdaq futures tank, Dow tumbles 350 points as AI fears rock tech stocks
Published On Jan 27, 2025, 6:28 AM
The stock market saw a significant drop with Nasdaq futures plummeting 4.3%, Dow futures declining over 380 points, and S&P 500 futures dropping 2.4%. This decline was largely triggered by concerns over a Chinese AI startup, DeepSeek, whose claims about using cheaper technology to match the performance of established American AI models raised doubts about the profitability of companies like Nvidia. Nvidia shares fell more than 11% in pre-market trading, impacting other tech stocks like ASML and Microsoft, as investors reevaluated their positions amidst a looming volatility in the AI sector. Economically, safe asset allocations increased as Treasury yields fell and haven currencies gained strength amidst fears of renewed trade tensions.
Stock Forecasts
NVDA
Negative
Given the significant concerns over AI leadership and market dynamics triggered by competition from lower-cost alternatives, the technology sector, particularly companies heavily invested in AI, will likely face further pressure in the near term. Nvidia's sharp drop highlights uncertainty amongst investors regarding the sustainability of AI-driven growth, especially if competitors begin to erode market share.
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