Nasdaq and S&P 500 Rebound After Tech Selloff

On Tuesday, the Nasdaq and S&P 500 rebounded, countering a sharp stock selloff on Monday sparked by concerns surrounding Chinese startup DeepSeek and its potentially cheaper AI model.

Nvidia (NVDA), a leader in the technology sector, emerged as the standout performer, closing the day with a gain of nearly 9% after shedding a record $589 billion from its market capitalization in the previous session.

The Nasdaq Composite (^IXIC), heavily weighted towards technology stocks, surged over 2%, reversing a closing loss of more than 3%. The S&P 500 (^GSPC) rose approximately 0.9%, while the Dow Jones Industrial Average (^DJI) gained roughly 0.3%. Notably, the technology sector recorded its most significant two-day reversal in over two years after enduring its worst day since March 2020 on Monday.

Chipmakers and Tech Stocks Recover

Stocks began to recover losses incurred during Monday's tech-led rout, which followed a wave of buzz surrounding DeepSeek's potentially cheaper AI model. The potential threat to U.S. dominance in AI raised concerns about whether chipmakers and other technology companies could meet lofty earnings expectations.

With the DeepSeek uncertainty in mind, investors are paying close attention to the upcoming earnings reports from Big Tech giants Apple (AAPL), Tesla (TSLA), Meta (META), and Microsoft (MSFT).

Fed Meeting and Tariff Concerns

Investors also considered President Donald Trump's tougher stance on tariffs, which has cast a shadow on market sentiment. Additionally, the Federal Reserve's two-day policy meeting began on Tuesday, where the impact of Trump's policies is likely to be discussed.

The central bank is widely expected to keep interest rates unchanged, considering recent positive economic data. However, the dollar (DX=F) strengthened following Trump's renewed tariff threats, reviving worries about a trade war. Trump expressed his desire for universal tariffs, significantly higher than the 2.5% reportedly planned by incoming Treasury Secretary Scott Bessent.

Starbucks Surges on Earnings Beat

Starbucks (SBUX) stock rose over 4% in after-hours trading on Tuesday after reporting earnings that surpassed estimates on both revenue and earnings per share. The coffee giant's same-store sales declined for the fourth consecutive quarter as it continued to implement its turnaround strategy.

Container Store Emerges from Bankruptcy

The Container Store announced its emergence from Chapter 11 bankruptcy on Tuesday. The struggling home goods store secured new financing, reduced debt obligations, and modified its asset-backed lending facility to provide additional capacity.

Nvidia Rises on Tech Rebound

Nvidia (NVDA) rebounded with a gain of over 7% on Tuesday as technology stocks recovered from the sharp selloff. The AI chip giant recovered a portion of its 17% drop on Monday, sparked by investor anxiety related to the DeepSeek AI model.

AI-Exposed Power Stocks Attempt Recovery

AI-exposed power stocks attempted to recover on Tuesday after being hammered in the tech rout due to concerns that energy demand for the AI boom might not be as strong as previously anticipated. Constellation Energy (CEG), the largest nuclear plant operator in the U.S., remained relatively stable after tumbling 21% on Monday. Electricity generator Vistra Corp (VST) rose more than 4% after sinking by a record 28%. Power equipment maker and servicer GE Vernova (GEV) also gained 2%, recouping a fraction of its one-day 21% drop.

Trump's Orbit Attempts to Calm Markets on Tariffs

Mixed messages from President Trump's inner circle regarding tariff implementations have created uncertainty in the markets. Public signals from Trump himself often seem at odds with his top advisors.

OpenAI Launches ChatGPT Gov

OpenAI debuted a tailored version of ChatGPT designed for U.S. government agencies. The new service, ChatGPT Gov, aims to simplify government access to AI models while empowering staffers to manage security and compliance.

JetBlue Stock Plummets on Weak Outlook

JetBlue (JBLU) shares fell as much as 22% on Tuesday, their most significant drop since 2020, after the airline provided a disappointing first-quarter outlook for revenue per available seat mile (RASM).

U.S. Home Prices Hit Record High

U.S. home prices reached a record high in November, driven by an acceleration in the pace of price increases. The S&P Case-Shiller National Home Price Index rose 3.8% year-over-year in November, higher than the previous increase of 3.6% in October.