Major United States benchmark averages regained ground on Tuesday (Wednesday AEDT), partially reversing Monday's losses triggered by concerns over Chinese artificial intelligence startup DeepSeek.
The Dow Jones Industrial Average advanced 136.8 points or 0.3% to 44,850.4, the S&P 500 gained 55.4 points or 1% to 6,067.7 and the Nasdaq Composite rose 387 points or 2% to 19,724.
Nvidia shares rebounded 8.9% during Tuesday's session after the company suffered a staggering 17% loss on Monday, wiping nearly US$600 billion from its market value - the largest single-day loss for a U.S. firm.
Broadcom and Oracle also saw gains of 2.6% and 3.6% respectively, while Google, Microsoft and Meta Platforms added 1.8%, 2.9%, and 2.2% respectively.
Monday’s sell-off was fuelled by concerns about DeepSeek, a Chinese AI startup that recently unveiled a free, open-source large language model built for less than $6 million. The model, powered by a low-cost chip setup, has sparked fears over the future competitiveness of U.S. AI investments.
Market participants now turn their attention to a series of corporate earnings reports from major technology companies including Meta Platforms, Microsoft, Tesla, and Apple, due later this week.
Additionally, the Federal Reserve’s interest rate decision on Wednesday will be closely watched. While the CME FedWatch Tool indicates a 97.3% chance that rates will remain steady, uncertainty lingers over how many rate cuts Fed Chair Jerome Powell will signal for the year ahead.
On the bond markets, 10-year and 2-year yields were little changed at 4.54% and 4.199%, respectively.
