DeepSeek AI Model Sparks Market Jitters, Challenging U.S. Tech Dominance

EMEA Morning Briefing : AI Jitters Ripple Through Markets

France consumer confidence survey, trading updates for SAP Opening Call: European stock futures were higher, after Asia stocks were broadly mixed. The yield on U.S. Treasurys were flat and the dollar edged higher. Gold and oil rose. Equities: European futures pointed to a higher open after Wall Street's bloodbath in Nvidia and other AI stocks overnight, wiping out some $1 trillion from the stock market's value. Chinese AI startup DeepSeek and concerns about the threat that it poses to U.S. tech dominance have spooked markets, says IG's Yeap Jun Rong. However, there may be some "sell first, think later" thinking at play, he added, noting that opinions remain divided on whether DeepSeek will be a game-changer that reshapes the U.S. AI landscape. Overcrowded long-tech positioning may have exacerbated the selloff, and the broader narrative points to rotation rather than full-on reversal, he said, noting that he is keeping a lookout for near-term price recovery as major tech names close in on key support levels. Forex: While the dollar initially rallied on safe-haven demand, the AI news could prove ultimately negative for the currency, said Deutsche Bank forex analyst George Saravelos. "If technology dissemination is more global and reduces a U.S.-specific technological advantage, the impact should be considered to be a marginal dollar negative," he said. A dotcom-style unwind of U.S. tech valuations could unfold, he added. Bonds: Treasury yields were flat after finishing at the lowest levels of 2025 on Monday as traders weighed a diminishing risk of U.S. tariffs, weak data from China and questions about the valuations of dominant technology companies. Meanwhile, investors await the Federal Reserve's first policy meeting of the year, with a decision on interest rates expected Wednesday. While the Fed is expected to hold rates steady, investors will be looking for important updates on inflation and the potential fallout from tariffs being proposed by the Trump administration. Energy: Oil edged higher, with the upcoming Federal Reserve rate decision expected to play a critical role in shaping market sentiment, said Harbourfront Wealth - Sonora Wealth Group. A hawkish monetary stance is likely to weigh on economic growth and oil demand expectations, investment advisor David Eng wrote. A softer monetary approach could lend support to crude prices, Eng said. Metals: Gold edged higher as investors looked ahead to the Federal Reserve's interest rate decision due on Wednesday. Eyes are on Fed Chair Powell's speech, where a hawkish tone could weigh on the market, said Exness' Inki Cho. Market participants are also closely monitoring how the central bank will respond to President Trump's calls for interest rate reductions, the market strategist added. - Copper declined amid broader risk-off sentiment across base metals triggered by the selloff in the technology space, ANZ Research said. Economic data from China also sparked concerns about growth in the country, showing a more severe slowdown in factory activity than expected ahead of the Lunar New Year holiday, ANZ added. The sentiment for copper was also shaken by Trump's tariff threat toward Colombia, it said. - Iron-ore prices should find support around US$100-US$110/ton from wet weather in Australia's Pilbara region, UBS said. Rainfall and flooding has already knocked out one of Rio Tinto's railcar dumpers at the East Intercourse Island port facility, which shipped 45 million tons of the company's iron ore in 2024, the bank noted, adding that it's expected to take 3-4 weeks to repair. Analyst Lachlan Shaw said the wet season in the Pilbara is far from over, with Rio Tinto looking to be the most affected, while BHP and Fortescue faring slightly better. TODAY'S TOP HEADLINES DeepSeek Undercuts Belief That Chip-Hungry U.S. Players Will Win AI Race Anything vaguely related to artificial intelligence was smashed on Monday after investors spent the weekend frantically googling DeepSeek-R1, the low-cost Chinese AI model released last week. The new generative-AI model, which claims performance on a comparison with OpenAI's latest, stuck a knife into two beliefs that have come to dominate investment in the past two years. First, that AI needs massive amounts of new infrastructure, energy and microchips, mostly from Nvidia. And second, that the winners of AI will be the dominant American technology companies. New Voters Could Shake Up Fed Meetings This Year The new voters on the Federal Reserve's policy committee in 2025 are an official seen as one of the system's most dovish, as well as a centrist and two new faces who could bring a more stringent anti-inflation perspective. That could mean less consensus behind the scenes as the central bank picks its way through a challenging economic outlook. Powell's goal at this week's Fed meeting: Don't give Trump an easy target Eight days after President Donald Trump's return to the White House, Federal Reserve officials will gather in Washington to discuss the outlook for interest-rate policy, with a goal of simply trying to stay out of the way. "It's still a very strong Trump news cycle. The last thing Powell wants to do is to kind of paint a target on the Fed" by suggesting in any way that interest-rate policy "could interfere with the pursuit of the Trump agenda," said Derek Tang, head of the LHMeyer research team that forecasts Fed policy. Tesla, BMW Sue EU as Tension Mounts on Chinese EV Tariffs Tesla and Germany's BMW are suing the European Commission, joining a growing band of Chinese automakers to oppose the European Union on its punitive tariffs on electric vehicles. Both Tesla Shanghai and BMW filed cases at the General Court of the European Union, the bloc's second-highest court, according to its website. DeepSeek Won't Sink U.S. AI Titans Necessity might be the mother of all invention, but sparking the mother of all selloffs seemed like a stretch. That wasn't the case Monday morning, though, as U.S. markets opened to fresh fears about DeepSeek. The Chinese artificial-intelligence startup announced a significant breakthrough late last week with AI models that perform nearly on par with advanced U.S.-born technology. The rub is that DeepSeek claims to have trained one of its latest models for $5.6 million in computing costs-a fraction of what is currently spent on this side of the Pacific on the same activity. OpenAI's GPT-4 model that was launched in late 2023 cost more than $100 million to train, according to Chief Executive Sam Altman. In a podcast last year, Anthropic CEO Dario Amodei said the cost to train some models is approaching $1 billion. 07:00/EU: 4Q New Commercial Vehicle Registrations in Europe statistics (EU27 + EFTA3) All times in GMT. Powered by Onclusive and Dow Jones. Write to us at newsletters@dowjones.com We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions. This article is a text version of a Wall Street Journal newsletter published earlier today.

US Stock Futures Tumble As DeepSeek Buzz Jolts Big Tech: Expert Says The Chinese AI Model Is Yet To Prove Its Viability At Lower Cost In Long Term - Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN)

U.S. stock futures dropped sharply on Monday after the rise in the popularity of DeepSeek, a Chinese artificial intelligence model that demonstrates high performance at a significantly lower cost. This development sent shockwaves through the market, challenging the belief that massive GPU investments are necessary for powerful AI, particularly threatening big tech companies. All major index futures were down, with the Nasdaq 100 falling more than 4.3%. This drop comes after the indices had posted gains for two consecutive weeks. Apart from this, five of the total 'Magnificent Seven' will report their earnings this week. The 10-year Treasury yield stood at 4.50%, while the two-year yield was at 4.17%. According to the CME Group's FedWatch tool, there is a 99.5% chance that the Federal Reserve will keep interest rates unchanged later this week. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ both experienced negative premarket trading on Thursday. SPY fell 2.36% to $593.6, and QQQ plunged 4.10% to $507.92, according to Benzinga Pro data. Cues From The Last Session U.S. stocks ended lower, with the S&P 500 retreating after hitting record highs on Friday. Nvidia Corp. NVDA dropped more than 3%, and Tesla Inc TSLA fell over 1%. However, all three major indices posted their second consecutive positive week, with the S&P 500 and Nasdaq rising 1.7%, and the Dow up 2.2%. Twilio Inc TWLO shares surged over 20% following strong Q4 guidance and a revenue increase, prompting analysts to raise price targets. Economic data showed the S&P Global Services PMI dropped to 52.8 in January, while the Manufacturing PMI rose to 50.1. Most S&P 500 sectors closed higher, with gains in communication services, utilities, and consumer staples. However, tech and energy stocks declined. The Dow fell 140 points or 0.32% to 44,424.25, the S&P 500 lost 0.29% to 6,101.24, and the Nasdaq Composite dropped 0.50% to 19,954.30. Russell 2000 Index slipped 0.30% to 2,307.74. Insights From Analysts Assessing the DeepSeek impact, the global macroeconomic expert and market strategist, Anish Nanda said that the speed, cost, and focus of China's progress on chips is causing a rotation out of growth into value stocks. However, he added that it remains to be seen if DeepSeek will prove to be a viable, cheaper alternative in the long term and if they can consistently innovate and take a leadership position in the sector that can be sustained. "Also little is known about the lab and its founder, Liang WenFeng," he told Benzinga. "Nevertheless, it still poses a risk if U.S. tech giants' pricing power is finally being threatened and if their massive AI spending needs a rethink. Only time will tell who will emerge the winner in the long run. A tough battle seems to be on the cards." Ed Yardeni and Eric Wallerstein of Yardeni Research pointed out that this week will see a slew of big tech companies report their earnings. "The next round of fun begins this week and next week when the Magnificent-7 report Q4 results," the note said. Microsoft Corporation MSFT, Tesla Inc TSLA, and Meta Platforms Inc META will report earnings on Wednesday, Jan. 29. Apple Inc AAPL and Amazon.com Inc AMZN will report on Thursday, Jan. 30. Whereas Alphabet Inc GOOG GOOGL will report on Tuesday, Feb. 4, Nvidia Corporation NVDA, on the other hand, won't report until Feb. 26. "The question is whether they will disappoint because their capital spending on AI is soaring faster than their revenues. That could squeeze their collective profit margin. The forward profit margin of the Mag-7 has soared from 18.0% at the start of 2023 to 25.5% during the Jan. 25 week," the note added. As per the CME's FedWatch tool, the probability of having no change in the rates was at 65.6% for March and 44.4% for May. Talking about this and Bank of Japan's hike last week, the CEO of Mind Money Julia Khandoshko said, "In the current environment of global monetary uncertainty, with no clear timeline for when the Federal Reserve might further continue its easing rates, the BoJ's decision looks like a calculated response to economic challenges." See Also: How to Trade Futures Upcoming Economic Data Here's what investors will keep an eye on for the week: On Monday, December's new home sales will be announced at 10:00 a.m., ET. On Tuesday, durable goods orders data for December will be out by 8:30 a.m., ET. November's S&P Case-Shiller home price index for 20 cities will be released at 9:00 a.m., ET. Consumer confidence data for January will be announced at 10:00 a.m., ET. On Wednesday, December's data for advanced U.S. trade balance in goods, advanced retail inventories, and advanced wholesale inventories will be released at 8:30 a.m., ET. The FOMC interest-rate decision will be out at 2:00 p.m. and Chairman Jerome Powell will address a press conference at 2:30 p.m., ET. On Thursday, the GDP data for the first quarter and the initial jobless claims data till Jan. 25, will be released at 8:30 a.m. ET. December's pending home sales will be out at 10:00 a.m., ET. On Friday, employment cost index data for Q4 will be released at 8:30 a.m., ET. Fed Governor Michelle Bowman will be speaking at 8:30 a.m., ET. Also, the core and headline personal consumption expenditure, along with personal income and spending data will be announced at 8:30 a.m., ET. The Chicago Business Barometer (PMI) for January will be out by 9:45 a.m., ET. Stocks In Focus: AT&T Inc T was up 1.23% in premarket on Monday ahead of its earnings before the opening bell. Analysts expect it to report quarterly earnings of 50 cents per share on revenue of $32.04 billion. Nucor Corp NUE was down 0.87% as Wall Street expects it to report quarterly earnings of 65 cents per share on revenue of $6.76 billion after the closing bell. Brown & Brown Inc BRO was up 0.94% ahead of its earnings slated to be announced after the closing bell. Analysts expect it to report quarterly earnings of 77 cents per share on revenue of $1.12 billion. Sanmina Corp SANM was up 0.05% as Wall Street expects it to report quarterly earnings of $1.36 per share on revenue of $1.98 billion during market hours. Logility Supply Chain Solutions Inc LGTY was up 23.85% after Aptean announced an agreement to acquire Logility in a $14.30-per-share all-cash deal. Following the DeepSeek development, Microsoft Corporation MSFT was down 7.22%, Tesla Inc TSLA slipped 4.54%, and Meta Platforms Inc META declined 5.94%. Also, Apple Inc AAPL and Amazon.com Inc AMZN dropped by 0.35% and 5.68%, respectively. Alphabet Inc GOOG plunged 4.30% and Nvidia Corporation NVDA plummeted 11.81% in premarket. Tevogen Bio Holdings Inc TVGN was up 53.33% after the company expanded collaboration with Microsoft to advance AI-Powered PredicTcell Technology on Azure. HWH International Inc HWH was up 14.70% after it received a notice on Jan. 23 from the Nasdaq Stock Market, informing the company that it has demonstrated compliance with Nasdaq's Listing Rule 5550(b). Commodities, Gold And Global Equity Markets: Crude oil futures were trading lower in the early New York session by 0.20% to hover around $74.51 per barrel. The gold spot index was down by 0.08% to $2,768.92 per ounce. The Dollar Index was down 0.24% at 107.181 level. Asian markets closed mixed on Monday as Hong Kong's Hang Seng, Australia's ASX 200, and South Korea's Kospi index rose. Whereas, India's S&P BSE Sensex, China's CSI 300, and Japan's Nikkei 225 index fell. European markets were lower in trade. Read Next: Michael Saylor's MicroStrategy Plummets Over 5% In Pre-Market As Chinese AI Startup DeepSeek Sends Shockwaves Through Crypto Universe: BTC Falls 5%, Dipping Below 100K Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs

Futures slip as investors eye China's latest AI push - what's moving markets By Investing.com

Investing.com - US stock futures dropped on Monday as markets assessed the release of a Chinese firm's new artificial intelligence model that may rival OpenAI's ChatGPT, while the dollar rose in response to a tariff spat between President Donald Trump and Colombia. Later this week, the Federal Reserve is expected to keep interest rates unchanged, while results from mega-cap tech companies could further impact sentiment around the broader stock market. Elsewhere, activity in China's manufacturing sector unexpectedly contracts in January. 1. Futures lower US stock futures pointed lower on Monday as investors eyed the implications of the launch of Chinese start-up DeepSeek's new artificial intelligence model that could compete with OpenAI's ChatGPT. Markerts were also gearing up for a major event-driven week featuring a crucial Federal Reserve interest rate decision and earnings from tech industry giants. By 03:21 ET (08:21 GMT), the S&P 500 futures contract had shed 103 points or 1.7%, Nasdaq 100 futures had fallen by 647 points or 3.0%, and Dow futures had declined by 395 points or 0.9%. The benchmark S&P 500 hit a record high last week. Traders were bolstered by hopes of easing inflation pressures in the US and eyeing a stance on international trade from the new Trump administration that has yet to include sweeping tariffs on friends and foes alike. Trump has threatened to impose levies on several US trading partners, with Colombia being the most recent target after the South American country refused to accept military flights carrying deportees from the US. Washington backed down over the weekend, however, following Colombia's decision to accept the aircraft. Some economists have argued that Trump's tariffs policies could revive price pressures, and subsequently persuade the Fed to roll out possible equity-friendly interest rate cuts at a slower pace this year. In January, the S&P 500 has advanced by around 4%, suggesting an early extension to a two-year string of increases in stocks. The longevity of this rally may be tested this week when the Fed announces its policy decision and big-name tech firms publish quarterly reports -- and potentially provide an update on their ambitions for artificial intelligence this year (more below). 2. Fed decision this week Underpinning much of Wall Street's sentiment is the Fed's impending rate announcement on Wednesday following the central bank's latest two-day meeting. The Fed is widely tipped to keep borrowing costs unchanged, following a string of reductions late last year that the left the all-important benchmark rate at a range of 4.25% to 4.50%. But investors will be keen for officials to give any sense of when they might resume cutting rates. The Fed's easing cycle has come after a sequence of hikes designed to corral red-hot inflation, but price growth remains above the Fed's 2% target. Money markets are pricing in around 40 basis points, or roughly two more cuts, by the end of December, according to LSEG data cited by Reuters. Yet a wild card faces the Fed in the form of President Trump. Policymakers have already flagged worries around uncertainty stemming from his tariff plans, while Trump himself has called on the Fed to slash rates. 3. Tech earnings loom large On the corporate front, attention will likely center on quarterly results from a host of influential tech companies this week. Instagram-owner Meta Platforms (NASDAQ:META), iPhone-maker Apple (NASDAQ:AAPL), software titan Microsoft (NASDAQ:MSFT) and Elon Musk-led electric carmaker Tesla (NASDAQ:TSLA) are all due to report. Some analysts have suggested that, with the Fed projected to pause rate cuts for an unknown period of time, the strength of these earnings could grant renewed impetus to a long-running surge in equities on Wall Street. Yet, with valuations already stretched, others have fretted that downbeat figures from these groups -- all members of the so-called "Magnificent 7" cadre of mega-cap tech players -- could dent optimism around an extension in the years-long rally. Adding to the intrigue has been China's DeepSeek, a start-up which purports to have built an AI model to rival that of OpenAI's ChatGPT despite not having access to high-end chips and spending sums well below the vast amounts shelled out by many of the tech industry's biggest names. "The entire US equity market is resting on the backs of mega-cap tech stocks, which in turn are being propelled by AI optimism - while DeepSeek's claims have attracted a fair amount of skepticism, the company could represent a fatal thread being pulled from the edifice of AI enthusiasm," analysts at Vital Knowledge said in a note to clients. 4. Chinese factory activity shrinks Chinese manufacturing sector activity unexpectedly shrank in January, official data showed on Monday, even as Beijing took steps to bolster local businesses through a raft of stimulus measures. Growth in non-manufacturing activity also slowed sharply in January, as the outlook for domestic firms was clouded by the prospect of harsh US trade tariffs. The January level of the manufacturing purchasing managers' index (PMI) fell to 49.1 in January, compared to expectations that it would remain steady at the 50.1 logged in December. A reading below 50 indicates contraction. Non-manufacturing PMI -- which includes both the services and construction industries -- slid to 50.2, lower than December's mark of 52.2. China's composite PMI came in at 50.1, below projections of 52.1 and 52.2 in the prior month. In a note to clients, analysts at Capital Economics said that while the PMIs suggest China's economy lost some momentum in January, "the slowdown at the start of the year will probably prove temporary, as fiscal stimulus should support economic growth in the near-term". 5. Oil dips Oil prices fell Monday, with traders assessing President Trump's call last week for the Organization of the Petroleum Exporting Countries to lower crude prices. By 03:25 ET, the US crude futures (WTI) dropped 0.4% to $74.33 a barrel, while the Brent contract declined by 0.5% to $77.19 per barrel. The crude market was nursing steep losses from last week after Trump declared a national emergency and called for a sharp increase in US energy output, while also urging the OPEC producer group to bring down crude prices. Oil markets were also hit by the weak PMI data from China, the world's top oil importer.

Stargate Adds Fuel To AI Frenzy, Chinese Stocks Sink On Trump Tariff Talk - Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ)

To gain an edge, this is what you need to know today. Fueling AI Frenzy An enlarged chart of artificial intelligence ETF Global X Artificial Intelligence & Technology ETF AIQ. Note the following: The chart shows there is a breakout in artificial intelligence ETF in the early trade this morning. As a caution, all breakouts do not sustain. Prudent investors should carefully watch if the breakout sustains or if it fails. RSI on the chart shows AIQ is barely overbought. RSI shows the ETF has room to run higher. Volume on the chart has been staying high, indicating sustained interest. The Trump administration has announced an artificial intelligence project called Stargate. Stargate is a $500B venture to build AI data centers. The initial equity funders of the joint venture are OpenAI, SoftBank Group Corp - ADR SFTBY, Oracle Corp ORCL, and Abu Dhabi's MGX. NVIDIA Corp NVDA, Microsoft Corp MSFT, and Arm Holdings PLC - ADR ARM are technology partners. The announcement of Stargate is adding fuel to the AI frenzy. In The Arora Report analysis, the headline of $500B for Stargate may turn out to be a mirage. The initial number is $100B and includes previously announced projects. The new funding may be significantly less than $100B. For the time being, the analysis does not matter because the momo crowd is buying extremely aggressively on the headline. Trump commented that 10% tariffs on China are under consideration. This is better news for Chinese stocks than the previously mentioned 60% tariffs. However, Chinese stocks sank on Trump's comment, and the yuan declined. The U.S. stock market ran up yesterday, in part, on the assumption that China may escape tariffs. This morning in the early, the market is ignoring Trump's China comments and continues to run up. Extreme positive sentiment is evidence as the market runs up on positive rumors, but when the rumors turn out to be false and the facts are negative, the market ignores it. In The Arora Report analysis, history is clear. Long term investments should be initiated when sentiment is extremely negative and profits should be taken when sentiment is extremely positive. The best way to take advantage of extremely positive sentiment is through tactical positions. The market is also being helped by strong earnings from: Netflix Inc NFLX, United Airlines Holdings Inc UAL, Interactive Brokers Group, Inc. IBKR, Procter & Gamble Co PG. Leading Indicators will be released at 10am ET and may be market moving. Magnificent Seven Money Flows In the early trade, money flows are positive in Amazon.com, Inc., Meta Platforms Inc, NVDA, and MSFT. In the early trade, money flows are neutral in Alphabet Inc Class C. In the early trade, money flows are negative in Apple Inc and Tesla Inc. In the early trade, money flows are positive in SPDR S&P 500 ETF Trust and Invesco QQQ Trust Series 1. Momo Crowd And Smart Money In Stocks Investors can gain an edge by knowing money flows in SPY and QQQ. Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil. The most popular ETF for gold is SPDR Gold Trust. The most popular ETF for silver is iShares Silver Trust. The most popular ETF for oil is United States Oil ETF. Bitcoin Bitcoin BTC/USD is seeing selling on continued disappointment that Trump has not announced a bitcoin reserve. Protection Band And What To Do Now It is important for investors to look ahead and not in the rearview mirror. The proprietary protection band from The Arora Report is very popular. The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors. Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time. You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges. A protection band of 0% would be very bullish and would indicate full investment with 0% in cash. A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling. It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market. Traditional 60/40 Portfolio Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time. Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time. The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter. $BTCBitcoin$104546.79-1.51%WatchlistOverviewAIQGlobal X Artificial Intelligence & Technology ETF$40.701.55%ARMARM Holdings PLC$182.1617.4%IBKRInteractive Brokers Group Inc$206.517.09%MSFTMicrosoft Corp$442.173.19%NFLXNetflix Inc$965.4811.0%NVDANVIDIA Corp$146.954.35%ORCLOracle Corp$184.526.93%PGProcter & Gamble Co$165.422.29%SFTBYSoftBank Group Corp$33.9510.5%UALUnited Airlines Holdings Inc$111.140.56%Market News and Data brought to you by Benzinga APIs

Chipmakers Rally On AI Stargate Bet, Netflix Soars, Bitcoin Falters As Trump Keeps Quiet On Crypto: What's Driving Markets Wednesday? - Abbott Laboratories (NYSE:ABT)

Netflix jumped 12% after a stellar quarter; Bitcoin slid 2% amid crypto uncertainty. Tech stocks enjoyed a surge Wednesday, driven by a sharp rise in semiconductor shares after President Donald Trump, OpenAI's Sam Altman, Oracle Corp. ORCL co-founder Larry Ellison, and SoftBank CEO Masayoshi Son unveiled the Stargate Project on Tuesday. The $500 billion initiative is set to develop AI infrastructure in the U.S. over the next four years. According to OpenAI, "this infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world." The iShares Semiconductor ETF SOXX was up 2.3% by midday trading in New York, eyeing their fourth straight positive session, the longest streak since late September. Yet, Tesla Inc. TSLA's CEO Elon Musk questioned the financial viability, saying that founders "don't actually have the money." The earnings season continues to be off to a strong start, with companies surpassing fourth-quarter expectations, showcasing the resilience of corporate America. Netflix Inc. NFLX delivered a stronger-than-expected quarterly performance across the board, driving its shares up 12%. Elsewhere, small caps paused for a breather following Tuesday's outperformance vis-à-vis large-cap counterparts. Chinese stocks slipped, with the iShares China Large-Cap ETF FXI down 0.8%, after Trump floated the idea of imposing a 10% tariff on China starting from Feb. 1. In commodities, gold prices surged to an 11-week-high, marking their tenth gain in the past eleven sessions, as investors flocked to safe-haven assets amid rising geopolitical risks. On Wednesday, Trump warned Russian President Vladimir Putin of potential new sanctions if a peace deal for Ukraine is not reached. Meanwhile, oil prices remained flat after three consecutive sessions of losses. In the crypto market, selling pressure is mounting as traders react to the absence of crypto-related commentary from the new administration, which had previously positioned itself as crypto-friendly. Bitcoin BTC/USD retreated nearly 2% to $104,000. Wednesday's Performance In Major US Indices, ETFs According to Benzinga Pro data: The SPDR S&P 500 ETF Trust SPY rose 0.8% to $602.64. The SPDR Dow Jones Industrial Average DIA inched 0.3% higher to $441.25. The tech-heavy Invesco QQQ Trust Series QQQ rallied 1.6% to $533.22. The iShares Russell 2000 ETF IWM fell 0.5% to $228.56. The Technology Select Sector SPDR Fund XLK rallied, up 2.4%; the Utilities Select Sector SPDR Fund XLU lagged, down 1.6%. Wednesday's Stock Movers Oracle Corp. rallied 7% as reaction to the Stargate project. Arm Holdings plc ARM was the chipmaker's top performer on Wednesday, up 14%. Nvidia Corp. NVDA rose over 4%. Procter & Gamble Co. PG rose 2.8% in reaction to quarterly results beating Street's estimates. Other stocks reacting to company earnings include Interactive Brokers Group Inc. IBKR, up 8.8%, Capital One Financial Corp. COF, up 2.6%, United Airlines Holdings Inc. UAL, down 2%, Seagate Technology Holdings plc STX, up 9%, Bank of America Corp. BAC, down 1.3%, Johnson & Johnson JNJ down 3.4%, Abbott Laboratories ABT, up 2.2%, GE Vernova Inc. GEV, up 2.2%, Amphenol Corp. APH, up 6%, The Travelers Co. TRV up 3.8%, Halliburton Co. HAL, down 1.3%, Ally Financials Inc. ALLY, up 4.5%. Major large-cap companies slated to report earnings after the close include Kinder Morgan Inc. KMI, Discover Financial Services DFS and Steel Dynamics Inc. STLD, Now Read: Coffee Prices Soar To Record Highs: Could Starbucks Face Margin Squeeze? Image: Shutterstock $BTCBitcoin$104293.08-1.75%WatchlistOverviewABTAbbott Laboratories$117.920.97%ALLYAlly Financial Inc$39.643.82%APHAmphenol Corp$77.186.13%ARMARM Holdings PLC$179.0315.4%BACBank of America Corp$45.91-1.62%COFCapital One Financial Corp$198.792.89%DFSDiscover Financial Services$194.792.92%DIASPDR Dow Jones Industrial Average ETF$441.170.24%FXIiShares China Large-Cap ETF$30.52-0.75%GEVGE Vernova Inc$423.471.80%HALHalliburton Co$29.02-1.73%IBKRInteractive Brokers Group Inc$209.108.44%IWMiShares Russell 2000 ETF$228.03-0.77%JNJJohnson & Johnson$144.16-2.69%KMIKinder Morgan Inc$30.82-1.27%NFLXNetflix Inc$960.2810.4%NVDANVIDIA Corp$146.954.35%ORCLOracle Corp$185.007.20%PGProcter & Gamble Co$165.972.62%QQQInvesco QQQ Trust, Series 1$532.901.54%SOXXiShares Semiconductor ETF$237.142.02%SPYSPDR S&P 500$607.230.69%STLDSteel Dynamics Inc$123.48-0.97%STXSeagate Technology Holdings PLC$109.398.04%TRVThe Travelers Companies Inc$247.973.69%TSLATesla Inc$423.28-0.19%UALUnited Airlines Holdings Inc$108.20-2.10%XLESPDR Select Sector Fund - Energy Select Sector$92.77-0.76%XLISPDR Select Sector Fund - Industrial$140.22-0.26%XLKSPDR Select Sector Fund - Technology$241.572.33%XLUSPDR Select Sector Fund - Utilities$78.67-1.73%Market News and Data brought to you by Benzinga APIs