Headline: Tech Stocks Rebound as Wall Street Assesses AI Concerns
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After a sell-off triggered by the emergence of Chinese startup DeepSeek and its potentially cheaper AI model, the Nasdaq and S&P 500 rebounded on Tuesday. Leading the rally was semiconductor giant Nvidia (NVDA), which surged nearly 9% after losing a record $589 billion in market capitalization on Monday.
Nvidia's gains fueled a 2% rise in the Nasdaq Composite (^IXIC), offsetting a closing loss of over 3%. The S&P 500 (^GSPC) climbed about 0.9%, while the Dow Jones Industrial Average (^DJI) gained approximately 0.3%. Notably, the tech sector saw its biggest two-day reversal in two years after experiencing its worst day since March 2020 on Monday.
Amid the DeepSeek concerns, investors turned their attention to upcoming earnings reports from tech behemoths such as Apple (AAPL), Tesla (TSLA), Meta (META), and Microsoft (MSFT). They also weighed comments from President Donald Trump on tariffs, which reignited worries about a trade war.
The Federal Reserve was widely anticipated to leave interest rates unchanged at its policy meeting on Wednesday. However, analysts expected discussions on the impact of Trump's policies on inflation and economic growth.
Other key developments in the market included:
* Starbucks (SBUX) shares jumped over 4% after the coffee chain reported a beat on both top and bottom lines.
* AI-exposed power stocks attempted a recovery after Monday's rout, with Constellation Energy (CEG), Vistra Corp (VST), and GE Vernova (GEV) posting gains.
* President Trump's administration attempted to calm market concerns over tariffs, despite contradictory signals from the president himself.
* Despite the AI-related sell-off, tech stocks led the market rebound on Tuesday, with notable gains from Apple, Amazon (AMZN), Alphabet (GOOGL, GOOG), and Microsoft.
* US home prices reached a record high in November, with the S&P Case-Shiller National Home Price Index rising 3.8% year-over-year.
* Nvidia's recovery from its AI-induced plunge saw it rise by 2%, while JetBlue (JBLU) stocks plummeted 22% on a disappointing revenue outlook.