The global stock market faced a dramatic shakeup on Monday, as technology stocks plunged in response to groundbreaking news from China’s DeepSeek. The upstart AI company announced it had trained an advanced artificial intelligence model at a fraction of the cost of Silicon Valley competitors. This revelation triggered a sudden reversal of the recent AI-fueled stock rally and left investors scrambling.
Nvidia Leads the Market Carnage
Shares of Nvidia, a prominent supplier of AI chips, suffered a staggering 17 per cent decline, erasing over $590 billion from its market value. Nvidia, once a stock market darling riding the AI wave, now faces uncertainty amid DeepSeek’s technological breakthrough.
Other chipmakers and AI-linked companies also felt the pressure. Broadcom’s stock dropped 17 per cent, while server manufacturer Super Micro Computer slid 13 per cent. Oracle was another casualty, falling 14 per cent as concerns about the sustainability of AI infrastructure investments mounted.
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The ripple effects were felt across indices. The tech-heavy Nasdaq Composite slid 3.1 per cent, marking one of its worst single-day performances in months. The S&P 500, which recently hit a record high, fell 1.5 per cent. However, the Dow Jones Industrial Average, which has less exposure to Big Tech, bucked the trend, gaining 0.7 per cent.
“This was a selloff that was bound to happen eventually,” said JJ Kinahan, CEO of IG North America. “The market goes up the stairs and out the window. Today was an out-the-window moment.”
The energy sector also took a hit, with companies tied to AI-related electricity demand seeing sharp losses. Constellation Energy, which had been riding the AI revolution’s coattails, saw its shares plummet 21 per cent.
Market Havens and Bitcoin’s Volatility
In response to the turmoil, investors sought safer assets like US government bonds. The 10-year Treasury yield fell to 4.529 per cent, reflecting increased demand for bonds as a haven.
Meanwhile, Bitcoin briefly dipped below the $100,000 mark—a symbolic milestone it reached following the election of President Trump—before rebounding to $101,405 by the market close.
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