Nasdaq posted its biggest one-day percentage drop since Dec. 18 on Monday as a low-cost Chinese artificial intelligence model prompted a steep selloff in U.S. chipmakers.
Market Snapshot
The Dow Jones Industrial Average rose 289.33 points, or 0.65%, to 44,713.58, the S&P 500 lost 88.96 points, or 1.46%, to 6,012.28 and the Nasdaq Composite lost 612.47 points, or 3.07%, to 19,341.83.
Market Movers
Nvidia, the leading maker of AI chips, dropped 17%, and ASML, the Dutch maker of chip-manufacturing machines, fell 5.8% after news that Chinese AI company DeepSeek developed an open-source large language model that competes with Microsoft-backed OpenAI's ChatGPT and uses less computing power. Semiconductor and software company Broadcom dipped 17%, while shares of Marvell Technology, the maker of integrated circuits, declined 12%.
Tesla, the maker of electric vehicles, is scheduled to report fourth-quarter earnings after the closing bell Wednesday. Margins during the period will be closely watched by investors. Analysts expect operating profit margins of about 10.5%, up from about 8% in the same quarter a year earlier. Tesla shares fell 2.3% on Monday.
Vertiv Holdings, the maker of cooling equipment for data centers, plunged 30%, and GE Vernova, the power-generation technology company, dropped 22% on concerns that DeepSeek and future AI systems won't require the vast amounts of electricity that Wall Street has expected. Constellation Energy, the largest owner of nuclear power plants in the U.S., fell 21%, while Vistra Energy, its competitor, plummeted 28%.
A report from Reuters over the weekend said the Trump administration was working on a plan to save TikTok that involves Oracle and a group of outside investors taking control of the app's global operations. President Donald Trump said he was in talks with multiple people over buying TikTok and likely would have a decision on the app's future within 30 days, according to Reuters. Oracle shares were down 14%. Last week, the company, along with OpenAI and SoftBank Group, announced an investment of as much as $500 billion in building artificial-intelligence infrastructure in the U.S. in a joint venture known as Stargate. Microsoft fell 2%.
AT&T posted better-than-expected fourth-quarter earnings as the number of customers that signed up for its mobile phone plans topped Wall Street estimates. AT&T touted "solid momentum in gaining profitable 5G and fiber subscribers." The stock rose 6.3%.
SoFi Technologies reported fourth-quarter adjusted earnings and revenue that topped analysts' estimates. Shares of the fintech, however, fell 10% as earnings guidance for the first quarter and year fell below expectations.
Akero Therapeutics surged 98% after the company reported positive preliminary topline results from a Phase 2b study evaluating the efficacy and safety of efruxifermin, its lead product candidate. Akero said the treatment reversed liver scarring in patients with advanced cases of the condition known as MASH.
United States Steel fell 1.6% after The Wall Street Journal, citing people familiar with the matter, reported that activist investor Ancora Holdings is preparing to wage a proxy battle at the steel company and wants U.S. Steel to drop its plans to merge with Japan's Nippon Steel. Ancora also seeks the ouster of U.S. Steel CEO David Burritt.
Venture Global was down 17% to $19.93. On Friday, the day the stock made its public debut, shares of the exporter of liquefied natural gas fell 4% to $24, below their initial-public-offering price of $25. The IPO valued Venture Global at $60 billion, the largest initial public offering for a U.S. energy company in history. The IPO was priced in the middle of its $23 to $27 a share range, which was a cut to its earlier range of $40 to $46 a share.
Market News
Bessent Wins Senate Confirmation To Be US Treasury Secretary
The US Senate confirmed Scott Bessent as the next secretary of the Treasury, becoming the chief economic spokesman for President Donald Trump and his sweeping agenda of tax cuts, deregulation and trade rebalancing.
The former hedge fund manager won confirmation by a vote of 68 to 29 Monday. Besides the support of all Republican senators, Bessent secured the backing of at least 15 Democrats, in a sign the minority party might be more willing to cooperate with the administration on certain economic matters than during Trump’s first term. Trump’s first Treasury chief, Steven Mnuchin, garnered a single Democratic vote in his 2017 confirmation.
World’s Richest People Lose $108 Billion After DeepSeek Selloff
The world’s 500 richest people, led by Nvidia Corp. co-founder Jensen Huang, lost a combined $108 billion on Monday as a tech-led selloff tied to Chinese AI developer DeepSeek sent major indices plunging.
Billionaires whose fortunes are linked to artificial intelligence were the biggest losers: Huang saw his fortune fall $20.1 billion, a 20% drop, while Oracle Corp. co-founder Larry Ellison’s $22.6 billion loss was larger in absolute terms, but represented just 12% of his fortune, according to the Bloomberg Billionaires Index. Dell Inc.’s Michael Dell lost $13 billion, and Binance Holdings Ltd. co-founder Changpeng “CZ” Zhao shaved $12.1 billion.
Trump Vows "Near Future" Tariffs, Calls DeepSeek Progress "Good"
President Donald Trump said he would soon impose tariffs on foreign pharmaceuticals, semiconductors and metals, and heralded news of DeepSeek’s apparent progress in artificial intelligence as “a positive,” as he addressed House Republicans on Monday.
“In the very near future we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States of America,” Trump said Monday as he spoke to a gathering of House Republicans at his Doral resort in Miami.
Trump added that he would “also be placing tariffs on steel, aluminum and copper.”
