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Stock market chaos caused by Chinese AI: Millions in losses for tech giants!
Wall Street reacts to interest rate decisions and quarterly reports. DAX reaches record high. AI discussion shapes the markets.
Stock market chaos caused by Chinese AI: Millions in losses for tech giants!
On January 30, 2025, Wall Street stock markets fell under pressure from new developments in the technology industry. Investors processed both the Federal Reserve's interest rate decision and quarterly reports from the tech sector. While the trading day began with some fluctuations, the most important indices still closed with gains: The Dow Jones rose by 0.32% to 44,882 points, the S&P 500 rose by 0.53% to 6,071 points and the Nasdaq climbed by 0.23%, while the Nasdaq 100 rose by 0.44%.
Jochen Stanzl from CMC Markets pointed out that price losses were triggered by concerns about Chinese AI competition, particularly the “DeepSeek” application. The ensuing “DeepSeek” shock led to a sell-off in the markets at the start of the week. Among the tech companies, Microsoft disappointed with a quarterly report, causing shares to fall by 6.18%. Tesla, on the other hand, was able to record an increase of 2.87% despite missing expectations for its quarterly figures. Meta, on the other hand, experienced a 21% jump in sales and reached a record high of $710.79, closing at $687 (+1.55%).
Current developments in the technology industry
The reactions to the AI application DeepSeek are serious. According to a report by Time The US technology exchange Nasdaq and the DAX, which ultimately closed at 21,727 points (+0.41%), were under pressure. Shares of Nvidia, a leader in AI microchips, fell 13%, losing $400 billion in value. The DAX also temporarily traded with a loss of almost 1.5% and ultimately closed 0.53% lower at 21,282.18 points.
The cost of developing the AI chatbot DeepSeek is just $5.6 million, which is considered small compared to the billions invested by US companies. This raises concerns about the dominance of US companies in the generative AI space. However, experts urge caution and warn against overestimating developments on the stock exchanges, as there is nothing groundbreakingly new in terms of technology.
Additional market events include the ECB cutting the deposit rate by 25 basis points to 2.75% and the Eurozone's stagnating GDP development in the fourth quarter of 2024. The price of gold climbed to a record high of almost $2,800 per troy ounce. Deutsche Bank reported a 36% drop in profits, while DWS exceeded the asset threshold of over one trillion euros. Continental announced the closure of several plants, affecting 580 jobs, while UPS shares fell 14.11%.