{"id":66627,"date":"2025-01-27T14:17:19","date_gmt":"2025-01-27T14:17:19","guid":{"rendered":"https:\/\/hub.onequity.com\/?p=5770"},"modified":"2025-01-27T14:17:19","modified_gmt":"2025-01-27T14:17:19","slug":"nasdaq-futures-plummet-4-the-technology-sector-is-severely-hit-by-the-chinese-measure-on-ai","status":"publish","type":"post","link":"https:\/\/insights.onequity.com\/es\/nasdaq-futures-plummet-4-the-technology-sector-is-severely-hit-by-the-chinese-measure-on-ai\/","title":{"rendered":"Nasdaq Futures Plummet 4%, Technology Sector Hit Hard by Chinese AI Measures"},"content":{"rendered":"\n<p>US stock index futures fell sharply on Monday, with the technology sector suffering significant losses as investors assessed the competitive threat posed by Chinese artificial intelligence start-up DeepSeek in a highly valued industry.<\/p>\n\n\n\n<p><a href=\"https:\/\/hub.onequity.com\/education\/17\/10\/2024\/demystifying-the-nasdaq-100-your-guide-to-techs-leading-index\/\">Dow Jones<\/a> futures were down 433 points, or 1%, <a href=\"https:\/\/hub.onequity.com\/education\/03\/10\/2024\/understanding-the-sp-500-a-key-market-indicator\/\">S&amp;P 500<\/a> futures were down 144 points, or around 2.4%, and <a href=\"https:\/\/hub.onequity.com\/education\/17\/10\/2024\/demystifying-the-nasdaq-100-your-guide-to-techs-leading-index\/\">Nasdaq<\/a> 100 futures were down 862 points, or around 4%. The CBOE Volatility Index rose 14% to 18.68.<\/p>\n\n\n\n<p>Sentiment in the technology sector took a beating on Monday, prompting investors to take profits after the benchmark S&amp;P 500 index hit an all-time high the previous week.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Chinese DeepSeek Intensifies Pressure on Technology Stocks<\/strong><\/h2>\n\n\n\n<p>Chinese AI start-up DeepSeek unveiled its latest model, the R1, claiming performance comparable to leading US models like OpenAI\u2019s ChatGPT but at a substantially lower cost.<\/p>\n\n\n\n<p>This development presents a competitive threat to established players in the AI hardware market, particularly Nvidia (NVDA), whose shares have tumbled nearly 10% in pre-market trading.<\/p>\n\n\n\n<p>\u201cThe US stock market is heavily supported by large-cap technology stocks, driven largely by AI optimism. While DeepSeek\u2019s claims have been met with significant skepticism, the company could be the thread that unravels the edifice of AI enthusiasm,\u201d Vital Knowledge analysts noted in a report to clients.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Tariff Threat Persists<\/strong><\/h2>\n\n\n\n<p>Investor confidence has also been shaken by President Donald Trump\u2019s renewed threat to impose tariffs on Colombia. This followed the South American nation\u2019s initial refusal to permit the landing of two US repatriation flights carrying deportees, a directive linked to Colombian President Gustavo Petro.<\/p>\n\n\n\n<p>Although Colombia quickly reversed its decision, the incident served as a reminder that the Trump administration\u2019s economic sanctions on trading partners remain a looming possibility.<\/p>\n\n\n\n<p>Trump has previously announced that tariffs on Canada, Mexico, China, and the European Union could be implemented as early as February 1.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Earnings Season in Focus<\/strong><\/h2>\n\n\n\n<p>Investors are also bracing for results from major technology companies, including Meta Platforms (META), the parent of Instagram; Apple (AAPL), the maker of the iPhone; Microsoft (MSFT), the software giant; and Tesla (TSLA), the electric car manufacturer led by Elon Musk.<\/p>\n\n\n\n<p>According to FactSet data released on Friday, 80% of S&amp;P 500 companies that have reported fourth-quarter results so far have delivered positive earnings-per-share surprises, while 62% have posted revenue surprises.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Federal Reserve Meeting and Inflation Data Take Center Stage<\/strong><\/h2>\n\n\n\n<p>The Federal Reserve\u2019s upcoming monetary policy meeting at the end of this week will also be a key focus for investors.<\/p>\n\n\n\n<p>The Fed is expected to leave borrowing costs unchanged following a series of rate cuts at the end of last year, which brought the benchmark rate to a range of 4.25% to 4.50%.<\/p>\n\n\n\n<p>Market participants will closely watch for any signals from Fed officials regarding the timeline for resuming rate cuts, particularly as economic growth continues to exceed the Fed\u2019s 2% inflation target.<\/p>\n\n\n\n<p>Additionally, the Federal Reserve\u2019s preferred inflation gauge, the personal consumption expenditures (PCE) price index, along with preliminary fourth-quarter GDP forecasts, will be released this week, providing further insight into the state of the economy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Oil Prices Stabilize After Recent Declines<\/strong><\/h2>\n\n\n\n<p>Oil prices remained stable on Monday, following a week of losses driven by President Trump\u2019s call for the Organization of Petroleum Exporting Countries (OPEC) to lower crude oil prices.<\/p>\n\n\n\n<p>The crude oil market suffered a steep decline the previous week after Trump declared a national emergency to ramp up US energy production and called on OPEC to reduce oil prices.<\/p>\n\n\n\n<p>Weak purchasing managers\u2019 index (PMI) data from China, the world\u2019s largest oil importer, also weighed on the oil market, adding to bearish sentiment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>US stock index futures fell sharply on Monday, with the technology sector suffering significant losses as investors assessed the competitive [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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