Nasdaq and Tech Stocks Plummet Amid AI Concerns

* The Nasdaq Composite tanked 3% on Monday, weighed down by fears about the future of US dominance in artificial intelligence (AI).
* The catalyst for the sell-off was the emergence of Chinese startup DeepSeek, which unveiled a new AI model claimed to be more cost-efficient and less data-intensive than American counterparts.
* Chipmaker Nvidia (NVDA) was particularly hard hit, tumbling 17% and dragging the S&P 500 down by nearly 1.5%.
* Investors fled to defensive sectors, lifting the blue-chip Dow Jones Industrial Average by more than 0.6%, supported by shares of Apple (AAPL) and Salesforce (CRM).

Investors Question AI Boom

* DeepSeek's claims have raised questions about the sustainability of AI-driven growth and the demand for AI-related investments.
* Investors are reassessing the valuations of companies heavily exposed to AI spending, including chipmakers, data center operators, and power companies.
* Semiconductor equipment manufacturer ASML (ASML), Broadcom (AVGO), and Micron Technology (MU) also experienced significant declines.

Market Rebound Faces Resistance

* While the Dow outperformed on Monday, the overall market sentiment remained negative.
* The 10-year Treasury yield fell, indicating a flight to safety, while the value of the yen and Swiss franc surged.
* Investors are wary of a potential trade war between the US and Colombia, as President Trump threatens tariffs on the country's exports.
* The Federal Reserve will hold its first policy meeting of 2025 this week, which could further impact market sentiment.

Earnings Season and Economic Indicators

* Big Tech earnings season kicks off this week, with reports from Apple, Tesla (TSLA), Meta, and Microsoft (MSFT) expected.
* The Chicago Fed National Activity Index for December and new home sales data will also be released.