The stock market took a hit as fears surrounding artificial intelligence (AI) dominated Wall Street. The Nasdaq dropped over 3%, fueled by concerns over China’s DeepSeek, an AI startup challenging the dominance of US tech giants like OpenAI and Nvidia. DeepSeek’s more efficient model, using fewer chips, has shaken investor confidence in the AI-driven growth that’s powered major stocks. Nvidia saw its stock plunge by 11%, while other tech leaders, including Microsoft, Alphabet, and the “Magnifice ..
On Monday, the Nasdaq Composite led the way with a sharp drop of nearly 3%, and the S&P 500 followed closely behind, falling 1.7%. The Dow Jones Industrial Average also declined by 0.2%.
Is DeepSeek the new challenger to US’s AI dominance?
DeepSeek, a Chinese AI startup, has garnered attention after claims that its AI assistant performs as well as top models but at a fraction of the cost. Unli ..
Nvidia Takes a Hit: 11% Drop in Stock Price
One of the biggest casualties of this new AI competition is Nvidia, the chipmaker that has been a leader in AI hardware. Nvidia’s stock plummeted by nearly 11% in response to DeepSeek’s rise. Other tech companies tied to the AI boom also felt the impact. Semiconductor companies like ASML, Broadcom, and Micron Technology saw sharp declines, with ASML losing almost 8% of its stock value. The drop in these companies’ stocks is reflective of the gr ..
Are Investors losing confidence over DeepSeek’s impact on AI?
The arrival of DeepSeek on the AI scene has caused investors to rethink their strategies. Many are now questioning whether the investments that have fueled stock price growth in AI companies, like Nvidia, are sustainable in the long term. As the news of DeepSeek’s success spreads, tech companies like Microsoft, Alphabet (Google’s parent company), Meta, and Amazon also saw losses in their stock prices.
Where are Investors turning for safety during the Stock selloff?
As tech stocks faltered, investors turned to safer assets. The 10-year Treasury yield dropped to 4.50%, its lowest level in over a month, signaling a shift toward more secure investments. The Japanese yen and Swiss franc also saw gains, further indicating that investors are seeking safety from the market’s volatility.
In addition to AI fears, concerns over potential trade wars are adding another layer of uncertainty to the market. Former President Donald Trump’s threats of new tariffs have revived worries about the economic impact of trade disputes, particularly with China and other global partners. These trade tensions, combined with the rise of DeepSeek, are leaving investors feeling uneasy about the future direction of the global economy.
FAQs:
How has DeepSeek affected Nvidia and other tech stocks?
DeepSeek’s rise has shaken investor confidence, leading to a sharp decline in Nvidia’s stock and other major tech companies. The Chinese AI startup claims to offer cheaper, efficient AI solutions, challenging Nvidia’s dominance and causing a market selloff.
What is causing the stock market drop today?
The stock market dropped due to growing concerns over DeepSeek’s potential impact on AI and its competition with U.S. tech giants like Nvidia. Additionally, fears of rising tariffs under President Trump added to the market’s uncertainty
