Tech stocks are dealing with significant declines with Nvidia leading the way, down around 11% in pre-market trading. The spotlight right now is on DeepSeek which is a development that Adam reported on last week. It suggests that China’s DeepSeek might have dramatically altered the financial landscape of artificial intelligence.
This situation is causing a ripple effect among chip manufacturers because the investors have started to react to the news since the weekend. Right now, S&P 500 futures have dropped by 2.4% making them reach their lowest point of the day. Whereas, Nasdaq futures dropped by 4.2%.
The market is dealing with a severe downturn, in contrast to this, Dow futures are down by 0.9% at this moment. As investors look for safer assets, the yield on 10-year Treasury bonds has decreased by over 9 basis points, which now stands at 4.524%.
In addition to this, the USD/JPY pair has fallen more than 1% testing the 154.00 mark after breaking below the 155.00 threshold earlier. Although the US dollar was the strongest performer during Asian trading, it has lost a major portion of its gains during the European morning session.
In the currency market, EUR/USD has rebounded from 1.0460 to 1.0500, whereas, GBP/USD has risen from 1.2430 to 1.2500 during the session. Similar to this, USD/CHF has declined, as the selloff in equities has caused increased demand for the Swiss franc.
Going back to US equities, while the S&P 500 reached a record high last week, it looks like it is set to wipe out the gains at the opening. Although this may appear as a minor disturbance on the chart, it has the potential to hint towards the beginning of a more substantial correction after the excessive optimism seen in 2024.
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