The artificial intelligence model of DeepSeek took the world by storm. The tech stocks majorly in the US were down as much as 17% in a single trading day. The new Chinese AI model threatens the dominance and valuation of American AI companies. Tech stocks in the US as well as Japan suffered huge losses after the arrival of a new AI model by DeepSeek.
Key global cues to know on January 28, 2024 Asian markets
Asia markets were trading on a lower note on Tuesday after Wall Street saw a massive dip in shares of tech companies dragged by DeepSeek’s challenge to America’s AI dominance. Japan’s Nikkei 225 was trading 0.64% lower at 39,328.99. However, the Asia Dow was trading 0.26% higher at 3,741.93. The Chinese benchmark index, the Shanghai Composite was trading flat at 3,250.60. Also, Japan’s semiconductor stocks fell the previous day due to Chinese AI startup DeepSeek’s challenge to the United States’ dominance in artificial intelligence, which has posed a risk to Asian technology firms involved in the U.S. AI value chain.
Wall Street
US indices closed Monday’s trade on a lower note as the new AI model shook the valuation and dominance of Amercian AI darlings. The technology-heavy Nasdaq Composite dipped 3.07% to close the session at 19,341.83. The share price of Nvidia dropped almost 17%, followed by Broadcom which lost 17.4%, and the list includes AMD, Microsoft, and others. The S&P 500 closed the session 1.46% lower at 6,012.28. However, the 30-stock Dow Jones Industrial Average added 289.33 points or 0.65% to close at 44,713.58.
US Yields
The yield on 10-year US bonds fell as much as 10 basis points to 4.52%, the lowest since January 02, after the news of a new AI model developed by Chinese startup DeepSeek. Following this, the haven currencies including the yen, Swiss franc, and US dollar rose.
US dollar
The US Dollar Index (DXY), which measures the dollar’s value against a basket of six foreign currencies, was up 0.36% at 107.74 on Tuesday morning. However, the dollar index fell 0.34% to 107.30. The index evaluates the strength or weakness of the US dollar in comparison to major currencies. The basket contains currencies such as the British Pound, Euro, Swedish Krona, Japanese Yen, Swiss Franc, etc.
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