Today’s DJIA Stock to Watch: Dow Jones Rises with DeepSeek Launch

The trading day in the stock market today was tumultuous as major indices responded to global economic events and technological advancements. The Nasdaq saw a significant drop of over 3% due to losses in AI-related companies, while the S&P500 experienced a smaller decrease of around 1.5%. However, the defensive sectors propelled the Dow Jones Industrial Average to a gain of 0.6%.

The reason for the market upheaval today was the launch of DeepSeek, a Chinese AI technology that poses a threat to U.S. dominance in the sector. This new AI model, which utilizes budget chips and less data processing power compared to Nvidia-powered models, caused concern among shareholders of AI-focused companies, leading to doubts about the profitability of AI technology.

Nvidia, a leader in the AI-driven market, experienced the biggest loss of the day, with its stock value plummeting by 17%. This drop erased a staggering $589 billion from its market capitalization as investors withdrew their investments due to the competition posed by DeepSeek. Predictions emerged that demand for high-end GPUs from Nvidia could decrease, impacting their projected revenue growth.

Other semiconductor giants like Broadcom and Micron Technology also felt the impact of the market downturn, with Broadcom’s stock price falling by more than 15% and ASML experiencing a more than 6% decline. AI-dependent strategies that experienced surges in stock prices last year are now facing skepticism from traders in light of recent industry developments.

Despite the overall decline in the tech market, Apple and Salesforce managed to buck the trend and achieve growth. Apple’s stock price increased by over 3% as the company focused less on AI chip development compared to its competitors. Salesforce also saw positive momentum thanks to strong investor sentiment directed towards AI-based software businesses following DeepSeek’s disruptive announcement.

The introduction of DeepSeek’s AI models, which matched industry-leading performance while utilizing cheaper hardware, caused uncertainty among U.S. tech stock investors. This led to a reevaluation of growth predictions for key players like Microsoft, Google, and Nvidia in the AI technology sector.

Investors reacted with fear and uncertainty to the news, with some questioning whether this represented market manipulation or a genuine threat to U.S. AI leadership. Despite the market turmoil, AI software companies like HubSpot and Workday saw investor interest as capital shifted towards AI-enabled solutions.

In terms of sectoral performance, the technology sector experienced a rough day as major semiconductors and AI stocks witnessed double-digit declines. On the other hand, the energy sector saw power stocks come under pressure, with companies operating AI data centers experiencing significant losses. The financial sector, however, remained more stable, with banks and investment firms less affected by the AI market disruptions.

As investors sought safety during the tech stock decline, defensive stocks like Johnson & Johnson, Procter & Gamble, and United Healthcare saw increased demand. Treasury bonds and safe-haven currencies like the Japanese yen and Swiss franc also surged as investors sought protection from stock market losses.

Looking ahead, upcoming events and earnings reports from key companies like Apple, Tesla, Meta, and Microsoft are expected to provide insights into AI funding and future development prospects following the recent market declines. Additionally, speculation about a rate cut from the Federal Reserve in their upcoming meeting could further impact market stability.