Live Markets: DeepSeek sinks stocks in early trade

Iron Mountain

27/01/2025 15:34

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      Nasdaq down ~2.5%, S&P 500 falls ~1.5%, Dow edges red
    

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      Tech weakest S&P 500 sector; Staples lead gainers
    

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      Euro STOXX 600 index off ~0.1%
    

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      Dollar down; gold, crude both off >1%; bitcoin down ~3%
    

        * 
      U.S. 10-Year Treasury hits 1-month low of 4.498%, now
~4.56%
    

  
       NEW YORK, Jan 27 (Reuters) - Welcome to the home for
real-time coverage of markets brought to you by Reuters
reporters. You can share your thoughts with us at 
     
    
    DEEPSEEK SINKS STOCKS IN EARLY TRADE
    U.S. stocks dropped in the early stages of trading  on
Monday as the surging popularity of a low-cost Chinese DeepSeek
artificial intelligence model ignited a selloff in AI-related
shares. 
    Megacap stocks, including Nvidia  NVDA.O , which have been a
major driver of the stock market rally over the past two years,
while helping to fuel concerns about market concentration, are
being hit particularly hard, with the chipmaker down about 11%
and staring at potentially its biggest one-day percentage drop
since March 2020. 
    The Philadelphia semiconductor index  .SOX  is plummeting
more than 6% and is on pace for its biggest daily percentage
drop since Sept. 3. 
    Still, the damage is not isolated to tech and chip-related
sectors, with data center real estate names such as Digital
Realty  DLR.N , Equinix  EQIX.O  and Iron Mountain  IRM.N 
suffering sharp declines. 
    "If it’s true that DeepSeek is the proverbial 'better
mousetrap,' that could disrupt the entire AI narrative that has
helped drive the markets over the last two years. It could mean
less demand for chips, less need for a massive buildout of power
production to fuel the models, and less need for largescale
datacenters," said Brian Jacobsen, chief economist at Annex
Wealth Management in Menomonee Falls, Wisconsin.
    "However, it could also mean that AI becomes more accessible
and help kickstart the development of a wide array of useful
applications."
    Both the S&P 500  .SPX  and Nasdaq Composite  .IXIC  are on
track for their worst daily performance since Dec. 18. The
Nasdaq is below its 50-day moving average for the first time
since Jan. 16.  
    Among the S&P 500 sectors, tech  .SPLRCT  is seeing the
brunt of the pressure, down nearly 5%, while the defensive
consumer staples  .SPLRCS  group is the best performer, rising
more than 1%. 
    On the data front, new home sales increased more than
expected in December, in the most recent sign the housing market
had gained some momentum toward the end of 2024. 
    Below is your market snapshot:
    
    
    (Chuck Mikolajczak)
     *****
    
    
    FOR MONDAY'S EARLIER LIVE MARKETS POSTS:
    
    DEEPSEEK THREAT DEEP-SIXING U.S. STOCK FUTURES - CLICK HERE
    
    TOO MUCH UNCERTAINTY TO BE POSITIVE ON TREASURIES - CLICK
HERE
    
    WHAT COULD TAKE MARKETS DOWN? - CLICK HERE
    
    DEEPSEEK CONCERNS SET STOXX TECH FOR WORST DAY SINCE OCT -
CLICK HERE
    
    BEFORE THE BELL: IT'S RISK OFF IN EUROPE -  CLICK HERE
    
    CHINA'S AI CHALLENGER PUTS INVESTORS ON EDGE - CLICK HERE
 
    

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Early trade Jan 27    https://tmsnrt.rs/3Emyjy5
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 (Reporting by Chuck Mikolajczak)
 ((charles.mikolajczak@tr.com; @ChuckMik;))