US Stock Market Highlights: Nvidia shares drop 17%, lose 560 billion in market cap

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US Stock Market today LIVE: Big Tech stocks took some of the heaviest losses, with Nvidia down 17.4%, and they dragged the Nasdaq composite down 3.5%. The S&P 500 was down 1.8% in afternoon trading and heading for its worst day in more than a month.

Stocks outside of AI-related industries held up much better, though, and the Dow Jones Industrial Average was up 160 points, or 0.4%, as of 2:02 p.m. Eastern time. The Dow has much less of an emphasis on tech than the S&P 500 and Nasdaq.

US Stock Market Today LIVE: A spokesperson for Nvidia commented on DeepSeek's advancements, stating that the startup's work demonstrates how innovative models can be developed by leveraging widely available technologies and computational resources, all while remaining fully compliant with export control regulations, Reuters reported.

US Stock Market Today LIVE: Chinese tech startup DeepSeek AI recently unveiled its open-source AI model, DeepSeek-R1, which quickly gained global attention.

The model's release last week triggered a notable drop in technology stocks during pre-market trading, undermining investor confidence in the AI sector's reliance on high-tech chips.

DeepSeek was established by Fire-Flyer, the deep-learning division of High-Flyer, a Chinese quantitative hedge fund.

DeepSeek-R1, an advanced reasoning model, claims to outperform existing benchmarks across various critical tasks, making headlines worldwide upon its debut.

US Stock Market Today LIVE: US chip-maker Nvidia led a sharp decline in tech stocks on Monday after a low-cost Chinese generative AI model emerged, raising concerns about US dominance in the growing AI industry.

The AI chatbot, created by Hangzhou-based startup DeepSeek, reportedly matches the performance of leading US AI models despite significantly lower investments.

Nvidia, whose semiconductors are crucial to the AI sector, saw its shares drop over 15% in midday trading on Wall Street, wiping out more than $500 billion in market value.

The Nasdaq's next biggest drag was chip maker Broadcom Inc, down 15%, followed by Microsoft, off 3.7%, and Google parent Alphabet, which fell 2.7%.

The Philadelphia semiconductor index tumbled 7.9%, eyeing its biggest percentage drop since March 2020.

Monday’s plunge drove new fissures into a market narrative that prevailed since the re-election of Donald Trump in November, the America-first, tech-fueled uber-bullishness that saw a clear upward path for risky assets spurred by deregulation, tax cuts and even government sponsorship of AI investment. Treasury yields, up almost half a percentage point since November, slid sharply as haven-seeking investors laid aside concern - for today, anyway - that the new president’s policies will stoke inflation.

Nvidia shares tumbled as much as 13% soon after the opening bell Monday, erasing about $465 billion from the company’s market capitalization. That eclipsed the previous record — a 9% drop in September that wiped out about $279 billion in value — and was the biggest in US stock-market history.

Investors are digesting the implications of DeepSeek’s breakthrough products offering comparable performance at seemingly a fraction of the cost — and what this means for US tech behemoths that have funneled billions of dollars into cutting-edge AI processors.

The Dow Jones Industrial Average fell 0.27%, to 44,305, the S&P 500 lost 1.72% to 5,996 and the Nasdaq Composite fell around 3% to 19,342.

Nvidia , whose chips are the top choice for powering AI applications, dropped nearly 12% in early trading, while industry peers Broadcom and Marvell Technology fell more than 10% each.

Dominant AI chipmaker Nvidia slumped 11% in early trading, leading losses among heavyweight tech stocks that had powered Wall Street's main indexes to record levels. Microsoft shares tumbled 3.8%, Meta Platforms 3.1% and Alphabet 3.3%.

Big Tech stocks that have been the market’s biggest stars took the heaviest losses, with Nvidia down 10%, and they dragged the Nasdaq composite down 3.1%. The Dow Jones Industrial Average, which holds less tech, held up better with a drop of 0.3%. A Chinese company called DeepSeek said it had developed a large language model that can compete with U.S. giants at a fraction of the cost.

Futures on the tech-heavy Nasdaq 100 tumbled 3.5% and S&P 500 futures declined 2.1%, Reuters reported. The CBOE Volatility Index, known as Wall Street's "fear gauge", hit its highest since Dec.20, and was last up 6.3 points at 21.19.

Software giant Oracle, a central player in the Trump administration's recently announced $500 billion AI partnership, tumbled 8%. Microsoft slid 3.8% and Amazon fell 3.3%. Google parent company Alphabet and Facebook parent Meta each lost about 3.5%.

Chipmakers Nvidia and Broadcom both suffered double-digit percentage declines after the exhibit from China's DeepSeek. Software giant Oracle, a central player in the Trump administration's recently announced $500 billion AI partnership, tumbled 8%. Microsoft slid 3.8% and Amazon fell 3.3%. Google parent company Alphabet and Facebook parent Meta each lost about 3.5%.

Wall Street was set to drop at the open on Monday, as the surging popularity of a low-cost Chinese artificial intelligence model sparked a selloff in chipmaker Nvidia and other companies that stand to benefit from investments into the technology.

DeepSeek AI, a Chinese tech startup last week released its open-source AI model, DeepSeek-R1, which soon became the centre of attraction in the global market. Deep Dive

Futures for the S&P 500 sank 2.3% before the bell, while futures for the technology-heavy Nasdaq tumbled 3.9%. Futures for the Dow Jones Industrial Average declined 0.8%.

The same tech companies that have benefitted from the AI frenzy in the past year were getting pummeled before markets even officially opened on Monday.

Hedge funds were already waiting to see if a U.S.-fostered, home-grown artificial intelligence boom would continue as China's new AI model was emerging to challenge U.S. dominance in the sector, Reuters quoted a Goldman Sachs note. Nasdaq futures slumped and technology shares slid on Monday as the swelling popularity of a Chinese discount AI model wobbled investors' faith in the profitability of what the United States has to offer.

Bucking the wider trend, AT&T rose 1.6% after its fourth-quarter wireless subscriber growth surpassed expectations, Reuters reported. Global markets were also on edge as the U.S. and Colombia pulled back from the brink of a trade war on Sunday after the White House said the South American nation had agreed to accept military aircraft carrying deported migrants.

Power companies, which are expected to see a surge in demand from energy-intensive data centers needed to develop AI technology, also slid. Constellation Energy, Vistra , and GE Vernova were down between 12.8% and 16.1%.

Nvidia alone has risen by over 200% in about 18 months and trades at 56 times the value of its earnings, compared with a 53% rise in the Nasdaq, which trades at a multiple of 16 to the value of its constituents' earnings, Reuters quoted LSEG data

The hype around AI has powered a huge inflow of capital into the equity markets in the last 18 months in particular, as investors have bought into the technology, inflating company valuations and sending stock markets to record highs, Reuters reported

“It does put a lot of scrutiny at the level of valuations,” Benedicte Lowe, equity derivatives strategist at BNP Paribas Markets 360, told Bloomberg. “We are quite positive on US tech stock sector. But it puts pressure on the outlook and is a turning point for the companies at this stage in the cycle," the analyst added

Chinese artificial intelligence startup DeepSeek rocked global technology stocks Monday, raising questions over America’s technological dominance, Bloomberg reported. Buzz grew over the weekend about DeepSeek’s latest AI model being cost-effective while running on less-advanced chips, casting doubt on the validity of the rich valuations for companies like Nvidia Corp., which has led the global AI stock boom as its chips have been seen as essential to the technology. Deep dive