Nasdaq drops 3% as China's DeepSeek AI model hits tech shares
Mon January 27, 2025 5:25 PM
Tech plummeted like a rock and there was a flight to the more conventional industrials as the Chinese firm DeepSeek made the troubling announcement, challenging U.S. and Nvidia dominance, that they had built a bigger, better mousetrap in AI, sending Nvidia into the biggest one-day loss in history, 17%, and sending all the other sectors down with it. But to put things in perspective, though it was the biggest one-day loss, it’s only been since September that Nvidia had its other “biggest” one-day loss. The S&P also suffered its biggest one-day loss but only since Jan 10th. The overall chip index fared much worse registering its biggest one-day loss, a whopping 9.2%, in nearly five years.
But as today’s expert put it, “I don’t necessarily think whatever’s going to happen in the short while here, the next couple days, is where they are ultimately valued.” Put another way, with the indexes being at record highs, any kind of drubbing is going to also set records and drubbings are inevitable as anyone should have known that these AI rallies could not be sustained forever. Of course, that doesn’t mean they won’t come back, since they usually do. All eyes will be on big tech, especially Microsoft, as they post Q4 later this week. Volume was way up there at 17.4 billion, considerably over the 14.9 billion average.
DJ: 44,424.25 -140.82 NAS: 19,954.30
-99.38 S&P: 6,101.24
-17.47 1/24
DJ: 44,713.58 +289.33 NAS: 19,341.83
-612.47 S&P: 6,012.28
-88.96 1/27
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