Tech Stocks Rebound After AI-Driven Sell-Off, Nvidia Leads Recovery

Nasdaq leads Wall St higher, tech shares recover from Monday's sell-off

U.S. stocks ended higher on Tuesday, with Nvidia and other artificial intelligence-linked technology shares recovering from sharp losses the previous day as investors snapped up bargains. The Nasdaq jumped 2% and AI chip leader Nvidia rose 8.9%, a day after its 17% drop erased about $593 billion from its market value in the biggest single-session loss for any company. The S&P 500 technology sector rallied 3.6% in its biggest daily percentage gain since July 31, while an index of semiconductor shares gained 1.1%. Apple shares rose 3.7%. Investors were eager to hear from Apple, Microsoft and other companies when they report quarterly results later this week. The tech sell-off followed Chinese startup DeepSeek's launch of AI models it said were on a par or better than industry-leading U.S. rivals at a fraction of the cost. "We're getting the typical bounceback rally you'd expect when you have news that's not very specific and more of a potential for a future change," said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey. "Some of the tech market, particularly around AI, was ready for a bit of a sell-off, and this news provided the excuse for it. Today you're seeing the bargain hunters come back in and also those who are discounting the news about DeepSeek since we don't really know very much about it." The Dow Jones Industrial Average rose 136.77 points, or 0.31%, to 44,850.35, the S&P 500 gained 55.42 points, or 0.92%, to 6,067.70 and the Nasdaq Composite gained 391.75 points, or 2.03%, to 19,733.59. Nvidia's forward price-to-earnings ratio, a common valuation metric, had hit its cheapest since December 2023. Optimism over AI helped to drive sharp gains in Nvidia and the stock market for much of the last two years. Fourth-quarter 2024 U.S. earnings season is in full swing, with shares of Royal Caribbean rallying 12% after the cruise operator forecast annual profit largely above expectations. Boeing shares ended up 1.5%, though it reported its biggest annual loss since 2020. General Motors shares fell 8.9% following its results and outlook, with investors weighing the threat of tariffs that could hit the automaker's business. U.S. President Donald Trump said late on Monday he plans to impose tariffs on imported computer chips, pharmaceuticals and steel. On Wednesday, the Federal Reserve is widely expected to hold its lending rate steady in its first interest-rate decision of the year. Declining issues outnumbered advancers by a 1.13-to-1 ratio on the NYSE. There were 165 new highs and 46 new lows on the NYSE. On the Nasdaq, 2,188 stocks rose and 2,216 fell as declining issues outnumbered advancers by a 1.01-to-1 ratio. Volume on U.S. exchanges was 13.87 billion shares, compared with the roughly 15.5 billion average for the full session over the last 20 trading days.

S&P, Nasdaq futures regain some ground after tech rout

(Reuters) - Futures tied to the S&P 500 and the Nasdaq were higher on Tuesday after steep losses in the previous session, when the popularity of a low-cost Chinese artificial intelligence model rattled stocks of U.S. companies invested in the technology. Monday's selloff came after Chinese startup DeepSeek launched AI models it says are on a par or better than industry-leading models in the United States at a fraction of the cost. "The narrative on Monday was that the eye-watering sums spent on AI capex by mega-cap tech companies could be somewhat obsolete if a cheaper solution exists," analysts at BCA Research said in a note. AI chip leader Nvidia rose 4.8% in premarket trading, a day after $593 billion was wiped off its market value in the biggest single-session loss for any company. Other AI-linked stocks also regained some ground, with Oracle and Broadcom rising 3.5% and 4%, respectively. Power companies, which are expected to see a surge in demand from energy-intensive data centers needed to develop AI technology, were broadly higher after tumbling a day earlier. Vistra and GE Vernova added 4.6% and 3%. The tech-heavy Nasdaq dropped more than 3% on Monday, its worst single-day showing in more than a month, while the benchmark S&P 500 fell close to 1.5%. At 04:51 a.m. ET on Tuesday, Dow E-minis were up 25 points, or 0.06%, S&P 500 E-minis were up 19.5 points, or 0.32%, and Nasdaq 100 E-minis were up 125.75 points, or 0.59%. Company earnings are likely to take center stage this week. Boeing, General Motors and Lockheed Martin are among the companies due to report quarterly results later in the day, while "Magnificent 7" members Microsoft, Facebook-parent Meta, Apple and Tesla are slated for later this week. Also in focus, the Federal Reserve is widely expected to hold its lending rate steady in its first interest-rate decision of the year on Wednesday, while the December reading of personal consumption expenditures (PCE) is scheduled for Friday. A January consumer confidence reading is due at 10 a.m. ET later in the day. U.S. President Donald Trump said late on Monday he plans to impose tariffs on imported computer chips, pharmaceuticals and steel. A media report said newly elected Treasury secretary Scott Bessent has been pushing for new universal tariffs on U.S. imports to start at 2.5% and rise gradually by the same amount each month. Markets have been on edge about Trump's proposed tariffs on concerns they could exacerbate inflationary pressures and slow Fed rate cuts. (Reporting by Shashwat Chauhan and Lisa Pauline Mattackal in Bengaluru; Editing by Devika Syamnath)

Deep breath after AI jolt, Trump tariffs rumble

A look at the day ahead in U.S. and global markets from Mike Dolan Markets took a deep breath on Tuesday after Wall Street's shock start to the week, with the emergence of cheap Chinese artificial intelligence rival DeepSeek lopping more than half a trillion dollars off what had been America's most valuable firm Nvidia. The tech swoon clocked some impressive milestones and the long-standing concentration of megacap stocks in S&P500 at large dragged broader indexes down sharply. Nvidia's 17% one-day drop marked the biggest loss in market capitalisation for a single stock ever, outstripping its own record from last September. The 9% drop in US chipmakers was the biggest in almost four years and the Nasdaq's 3% was its biggest loss of the year so far. Perhaps most curiously, power companies, which are expected to see higher demand from energy-intensive data centers needed to develop AI, also fell sharply. Vistra dropped 28.3% and Constellation Energy fell 20%. Keeping it all in context, however, Nvidia's relegation from biggest to third most valuable firm merely brought its stock back to October levels - still 94% higher than it was a year ago. Even though the S&P500 had its biggest daily loss in a couple of weeks, the equal-weighted version of the index that evens out distortions of the handful of megacaps actually edged higher on the day and 70% of the index's stocks rose on Monday. Apple, which retook the top valued firm slot from Nvidia and which reports quarterly earnings on Thursday, was up 3% on Monday. So, an unnerving day for what has been the dominant AI theme around the world over the past 18 months - but not all as terrible as it seemed. U.S. AI developers welcomed the DeepSeek readout and model and even U.S. President Donald Trump merely characterised it as a wakeup call to U.S. tech firms. That said, the DeepSeek development reintroduces obvious questions from last summer about whether the scale of the investment spend was warranted and that will now be looked at forensically again through the unfolding earnings season. Before Apple tees up on Thursday, Microsoft, Tesla and Meta report earnings tomorrow. With mainland Chinese markets closed from today for the lunar new year holiday, fresh news on the saga is likely to be thin for a bit. Ahead of Tuesday's bell, U.S. stock futures appeared to find their feet, with Nasdaq up 0.7% and S&P futures up 0.4%. Nvidia bounced about 6% out of hours. The ripples overseas were limited too - with Japan's Nikkei caught in Monday's tech slipstream and underperforming with a loss of 1%. European stocks, by contrast, were up 0.7% to a new intraday record and Hong Kong was also marginally higher. One eye-catching aspect of Monday's shakeout was the degree to which it hit U.S. Treasury yields and Federal Reserve futures. With the Fed kicking off its latest two-day policy meeting today and widely expected to stand pat as it assesses the policies of the new Trump administration, rate futures reacted to tech wobble by moving to fully price two rate cuts this year. January consumer confidence readings top today's economic data diary. Two-year Treasury yields followed suit, plunging back below 4.2% for the first time in more than a month and 10-year yields dipped below 4.5% for the first time this year. Both have ticked back higher early on Tuesday as equity markets stabilised. The dollar reacted likewise, falling to new year lows during Monday's upheaval but regaining ground today. Helping that dollar bounceback was a re-boot of Trump tariff fears. Even though newly confirmed U.S. treasury Secretary Scott Bessent was reported to be pushing for a modest universal tariff hike of just 2.5%, Trump responded to that by further sweeping tariff threats on copper and aluminium imports. And in what seemed like another night of seemingly endless Trump commentary, the new President told reporters he thought Microsoft was in talks to acquire TikTok and that he would like to see a bidding war over the app. Elsewhere, HSBC's stock slipped as the bank said it would wind down its M&A and equities businesses in Europe, Britain and the Americas - signalling its biggest retrenchment from investment banking in decades and an acceleration of its shift to Asia. Key developments that should provide more direction to U.S. markets later on Tuesday: * US January consumer confidence, December durable goods orders, November house prices, Richmond Federal Reserve Jan business surveys, Dallas Fed service firms survey * US Federal Reserve's Federal Open Market Committee starts two-day meeting * US corporate earnings: Boeing, Starbucks, Kimberly-Clark, Sysco, Lockheed Martin, General Motors, Invesco, Stryker, Chubb, Packaging Corp of America, Royal Caribbean Cruises, Paccar, Synchrony, RTX, BXP, F5 * US Treasury sells $44 bln of 7-year notes, $30 bln 2-year floating rate notes (By Mike Dolan, editing by Ed Osmond; mike.dolan@thomsonreuters.com)

Nasdaq 100 futures bounce after Monday's sharp sell-off: Live updates

Traders work on the floor of the New York Stock Exchange at the opening bell on Jan. 27, 2025 in New York City. Nasdaq 100 futures rose Monday night following sharp declines for the S&P 500 and the Nasdaq Composite. S&P 500 futures added 0.1%, while Nasdaq 100 futures gained 0.3%. Futures tied to the Dow Jones Industrial Average slipped 32 points, or 0.07%. Select tech shares attempted to claw back losses in after-hours trading after the day's steep sell-off in companies tied to artificial intelligence. Nvidia added 2.8% in after-hours trading after suffering a nearly 17% decline on Monday, which resulted in a market cap loss of nearly $600 billion -- the biggest one-day drop for a U.S. company in history. Monday's sell-off was fueled by doubts about the continued dominance of current U.S. artificial intelligence leaders and their massive spending plans. The emergence of Chinese startup DeepSeek prompted these concerns after creating a competitive open-source AI reasoning model at less cost compared to what Silicon Valley has shelled out on AI model developments. DeepSeek surpassed rival OpenAI on Monday to become the most-downloaded free app in the U.S. on Apple's App Store.