Stock Market Tumbles: Nvidia Falls 15% as China’s DeepSeek Shakes AI Foundations
The stock market faced a significant shake-up today as Nvidia shares plummeted 15%, erasing over $400 billion in market value. The drop came in the wake of a disruptive move by China’s artificial intelligence startup, DeepSeek, which has developed high-performing AI models at lower costs—without relying on advanced chips from Nvidia and other global players.
DeepSeek’s breakthrough has raised concerns about the future of AI spending, triggering a widespread sell-off in tech stocks and AI infrastructure providers. The Nasdaq Composite tumbled 3.1%, leading U.S. stock market declines, while the S&P 500 slid 1.8% and the Dow Jones edged lower.
Key Market Highlights:
Tech Giants Hit Hard: Nvidia’s plunge dragged down other AI-heavy stocks, with Microsoft and Alphabet (Google’s parent) both falling more than 3%. Oracle and Super Micro Computer saw steep losses of over 11%.
Market Value Wipeout: The pullback has erased an estimated $1.1 trillion in market value, according to Dow Jones Market Data.
Treasurys Gain: Investors sought safety in bonds, pushing the 10-year Treasury yield below 4.55%.
Bitcoin Slips: Bitcoin briefly dipped below $100,000 before stabilizing slightly.
Global Stocks Mixed: Hong Kong’s Hang Seng Index emerged as a rare bright spot, while Europe’s Stoxx 600 ticked lower.
Coffee Prices Surge: Arabica coffee prices hit record highs after geopolitical tensions arose from tariff threats against Colombia, later withdrawn by the White House.
This upheaval in the stock market coincides with a crucial week for earnings, with major AI spenders like Microsoft and Meta preparing to report their financials. The developments have sparked a “rethink” among investors about the sustainability of the AI boom and its impact on tech and chip makers globally.
Stay tuned as we monitor the latest trends in stock performance, AI spending, and market forecasts. For traders and investors, understanding the evolving dynamics of the AI landscape is critical to navigating these turbulent times.
