Stock market today: Nasdaq tanks, S&P 500 drops as AI fears rock tech stocks
Published On Jan 27, 2025, 9:31 AM
The stock market experienced a significant downturn on Monday, led by a nearly 3% plunge in the Nasdaq Composite as concerns arose about a Chinese AI startup, DeepSeek, potentially challenging US firms like Nvidia in the AI space. Nvidia's stock fell over 11%, with other tech and chip-related stocks like ASML and Broadcom also experiencing losses. Investors are increasingly wary as Big Tech earnings season approaches, with attention on how these companies will address DeepSeek's claims about more efficient AI models. Additionally, the ongoing tariff discussions under President Trump's administration have added to market volatility, with expectations that tariffs may soon be enacted on various trade partners. The overall sentiment is shifting, leading investors to seek safety in assets like US Treasuries.
Stock Forecasts
NVDA
Negative
The fears surrounding DeepSeek’s technology raising questions about the competitive edge of US AI firms, particularly Nvidia, suggests a bearish outlook for the tech sector short-term until investors gain clarity on AI performance and valuations of major tech companies. Tariff uncertainties also add negative pressure, making investors wary about tech and semiconductor stocks.
META
Neutral
Given the current market dynamics and risks highlighted, and pending earnings results, companies heavily invested in AI, like Meta and Microsoft, could experience further volatility but might rebound if their results and guidance mitigate concerns. Therefore, the potential for recovery in these stocks remains but comes with significant risk.
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