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The S&P 500 and NASDAQ were down sharply Monday on concern about an artificial intelligence stock bubble popping because of the emergence of Chinese startup DeepSeek, which has possibly made a competitive AI model for a fraction of the billions Silicon Valley is spending.
The Dow Jones Industrials popped 289.33 points to close Monday at 44,713.58, thanks to gains in Apple, Johnson & Johnson and Travelers.
The much-broader index flopped 88.96 points, or 1.5%, to 6,012.28.
The NASDAQ Composite swooned 612.47 points, or 3.1%, to 19,341.83.
AI darling Nvidia dropped 18%, Broadcom lost 17%, and AMD shed 7%. Microsoft lost 2%. Palantir was hit for 6%. Megacap tech titan Amazon shed 1%.
Derivative plays from the AI buildout such as power providers were also hit big. Constellation Energy lost 21%, while Vistra dropped 30%.
On top of that, the Federal Reserve will hold its first policy meeting of the year, deciding on the level of interest rates Wednesday. Fed funds futures are pricing in a more than 99% chance that the central bank leaves interest rates unchanged.
Prices for the 10-year Treasury gained ground, lowering yields to 4.53% from Friday’s 4.62%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.60 to $73.08 U.S. a barrel.
Prices for gold plunged $36.00 an ounce to $2,742.90.80 U.S.
NASDAQ Flops, Dow Jumps
