Berliner Boersenzeitung - US stocks, Nvidia shares steady after Chinese AI shock

US tech shares tanked Monday, with Nvidia tumbling 17 percent, after China's DeepSeek unveiled its R1 chatbot, which can apparently match the capacity of top US AI products for a fraction of their development costs.

Nvidia, which designs chips used in AI applications, was up 2.8 percent in late morning trading, though still well below last week's levels.

The tech-heavy Nasdaq index was up around one percent after dropping more than three percent the previous day. The Dow and the wider S&P index were also higher, though lagging behind the Nasdaq.

Elsewhere, European stock markets were mixed while oil prices inched up, as traders awaited interest-rate decisions from the US Federal Reserve and European Central Bank due this week.

Nvidia's Monday plunge wiped more than half a trillion dollars from its market capitalisation -- the largest single-day loss in stock market history.

The Nvidia sell-off "may have gone too far", said Kathleen Brooks, research director at XTB, especially given some doubts over whether DeepSeek's AI was developed as cheaply as it claims.

"It may be too early to write off Nvidia yet, even though the prospect of a Chinese rival is causing a crisis for the chip maker," she said.

Gains in US equities last year were driven by a handful of large tech stocks, and the wider stock market largely avoided Monday's rout.

Nvidia has been the standout company leading a drive by investors to seek out all things AI while ignoring the massive sums it and companies such as Google and Microsoft are investing.

"It's difficult to work out if the worst is now over, or if yesterday's slump was just another sign that the top is already in for US equities," said David Morrison, senior analyst at Trade Nation.

Boeing reported a hefty fourth-quarter loss of almost $4 billion due to labour strikes and manufacturing issues.

But the aeroplane maker's shares rallied more than four percent on hopes that early turnaround signs under a new CEO may bear fruit.

General Motors reported a $3-billion quarterly loss Tuesday due to costs from restructuring a Chinese venture, and its shares dropped almost 10 percent even though the automaker had forecast higher profits this year.

Microsoft and Facebook-parent Meta report Wednesday.

Earlier, Tokyo fell as AI-linked companies were pulled lower and US President Donald Trump's comments rattled analysts.

The dollar rose after Trump said he wanted universal tariffs "much bigger" than the 2.5 percent suggested by his Treasury Secretary Scott Bessent, fanning fresh fears about a trade war.

Trump said he wants high tariffs on imported metals, pharmaceuticals and semiconductors.

Investors will turn their attention to interest-rate decisions this week.

The US Federal Reserve's policy-making committee meets Wednesday and is largely expected to leave rates unchanged, despite Trump's calls for lower interest rates from the officially independent central bank.

On Thursday, the European Central Bank will hold a press conference after its first meeting of the year, with some analysts expecting a small cut in lending rates.

- Key figures around 1640 GMT -

New York - Dow: UP 0.1 percent at 44,772.63 points

New York - S&P 500: UP 0.4 percent at 6,036.52

New York - Nasdaq Composite: UP 1.1 percent at 19,544.97

London - FTSE 100: UP 0.4 percent at 8,533.87 (close)

Paris - CAC 40: DOWN 0.1 percent at 7,897.37 (close)

Frankfurt - DAX: UP 0.7 percent at 21,430.58 (close)

Tokyo - Nikkei 225: DOWN 1.4 percent at 39,016.87 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 20,225.11 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0429 from $1.0492 on Monday

Pound/dollar: DOWN at $1.2438 from $1.2496

Dollar/yen: UP at 155.65 yen from 154.61 yen

Euro/pound: DOWN at 83.85 pence from 83.94 pence

Brent North Sea Crude: UP 0.2 percent at $77.20 per barrel

West Texas Intermediate: UP 0.2 percent at $73.30 per barrel

(P.Werner--BBZ)