Stocks climbed Tuesday, recovering some ground from a sell-off sparked by the emergence of Chinese artificial intelligence startup DeepSeek that sent tech shares reeling.
The S&P 500 advanced 0.92% to 6,067.70, with technology shares seeing the biggest gains among sectors. The Technology Select Sector SPDR Fund (XLK) rose more than 2%, following a 4.9% loss on Monday. The Nasdaq Composite surged 2.03% to 19,733.59, following a 3.1% decline a day ago.
The Dow Jones Industrial Average added 136.77 points, or 0.31%, to 44,850.35.
The DeepSeek AI threat came to a head on Monday following social media buzz over the weekend. The Chinese startup last month unveiled a free open-source large language model that it says took less than $6 million to build. The development spurred worries around Big Tech’s investment into AI that has been fueling the run in chipmakers, primarily Nvidia. DeepSeek, which is open-sourced and supposedly powered by a chip setup that costs a fraction of other leading AI models, surpassed rival OpenAI on Monday to become the most-downloaded free app in the U.S. on Apple’s App Store.
Investors hoped for Nvidia to remain in the green to shore up confidence in the AI trade, which has lifted not only shares of chipmakers in the past year, but also far-reaching parts of the market such as power producers. While Nvidia was in the green on Tuesday, Thomas Martin of Globalt Investments says investors should still watch their backs.
“I don’t think we’re in the clear necessarily. I think that we’re [in] a bit of uncertainty as people try to sort this out,” the senior portfolio manager told CNBC. “I believe that the theme about needing more … power for processing, data centers, etc., is still intact, but confidence has been shaken.”
Investors’ attention is turning toward corporate earnings due this week. A slate of “Magnificent Seven” companies will report in the coming days, with Meta Platforms, Microsoft, Tesla and Apple due later this week.
The Federal Reserve will also make its latest decision on interest rates Wednesday. Wall Street believes it is a near certainty that the central bank will halt its rate-cutting campaign and keep rates steady this week. What is not known is how many rate cuts Fed Chair Jerome Powell will signal are in the cards for this year.
Source: https://www.cnbc.com/2025/01/27/stock-market-today-live-updates.html