Nasdaq futures plunged on Monday to lead a stock rout on Wall Street as a Chinese startup rattled faith in US leadership and profitability in AI, hitting Nvidia (NVDA) and other Big Tech stocks.
Contracts on the tech-heavy Nasdaq 100 () sank 4.3%, while S&P 500 futures () tumbled 2.4%. Dow Jones Industrial Average futures () fell 0.9%, or about 380 points, on the heels of a winning week for the major gauges.
Markets have been rattled by claims by China’s DeepSeek that its AI assistant uses cheaper chips and less data than leading models, but performs equally well. A surge in DeepSeek’s popularity has spurred a scramble by investors to reassess bets that AI demand-driven growth will keep fueling gains for stocks.
AI bellwether Nvidia’s shares tumbled over 11% in pre-market trading, as chip-related names took a bruising. ASML lost 9%, while Arm (ARM), Broadcom (AVGO), and Micron Technology (MU) took similar hits.
Shares of Meta (META) and Microsoft (MSFT) both slid about 6% amid worries about megacaps’ hefty investment in AI. Tesla (TSLA) and Amazon (AMZN) also lost ground as techs sold off across the board.
Investors are now waiting for the start of Big Tech earnings season this week, which brings results from Apple (AAPL), Tesla, Meta, and Microsoft. Eyes will be on guidance for future profit as DeepSeek casts doubt on prospects for revenue.
Meanwhile, trade war concerns revived after a face-off between President Donald Trump and Colombia over the weekend. Trump threatened to impose 25% tariffs on the country’s goods in a row over deported migrants, before putting the duties on pause after a deal was reached.
The dispute underlined concerns that Trump won’t hold back on turning to tariffs as a way to push through a range of policy aims.
The Federal Reserve will hold its first policy meeting of 2025 this week, with officials are already on watch for quick-fire moves by Trump that could pose challenges to the central bank. The president has called for the Fed to lower interest rates, signaling a coming clash with policymakers, who begin their two-day gathering on Tuesday.
LIVE 1 update
