The major market indexes started the week on a mixed note, though technology stocks got hit particularly hard. Notably, the tech-heavy NASDAQ suffered a 612-point decline, or 3.1%. Most of the sharp selloff centered around news of the China-based AI startup DeepSeek. Specifically, if the company’s claims are true, its open-source AI model would pose a significant threat (in terms of affordability) to current players in the artificial intelligence realm. Notably, shares of NVIDIA (NVDA), a leading manufacturer of AI hardware and software, were particularly hard hit, diving 17% in market value, and shedding close to $600 billion in market cap. This gave it the dubious distinction of sustaining the largest one-day loss in market value for a U.S. company. The broader S&P 500 fared slightly better, shedding 88 points or 1.5%. But the Dow Jones Industrial Average bucked the trend by rising 289 points (0.7%).
Looking to the new trading day, stock futures were suggesting a bit of a rebound for tech issues ahead of the opening bell. In the overnight, markets in Asia were mixed. Meanwhile, the European indexes were all showing modest gains.
Elsewhere, fourth-quarter earnings season continues to barrel ahead. Wednesday will bring reports from three members of the trillion-plus market-cap club, specifically Microsoft (MSFT), Meta Platforms (META), and Tesla (TSLA), followed on Thursday by their peers Apple (AAPL) and Amazon.com (AMZN).
Turning to the economic calendar, this morning the Census Bureau reported on durable goods orders for December. The report, which indicated a decline of 2.2%, fell short of analyst estimates for a 0.1% month-over-month increase. Moreover, November’s figure was increased from a 1.2% drop, to a decline of 2%. Wednesday brings the latest interest-rate decision from the Federal Reserve. Current prognostications point to a greater than 97% chance that the central bank will leave its overnight target rate unchanged at 4.25%-4.50%. Indeed, looking further ahead, Wall Street does not expect the Fed to trim rates until it’s June meeting, where a quarter-point reduction is given about a 45% probability.
Thursday brings the Department of Labor’s tallies for initial unemployment claims. Expectations are that the number will come in slightly lower at 221,000 claims, versus 223,000 the week before.
The week wraps up with Friday’s release of the Personal Consumption Expenditures (PCE) price index. The Federal Reserve’s preferred measure of inflation is forecast to show a year-over-year increase of 2.6% for December, up from 2.4% the month before. – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
CLICK HERE for more information on our services or call 1-800-VALUELINE (1-800-825-8354). Our account managers are available Monday through Friday, 8:00 AM to 6:00 PM Eastern Time.
