NEW YORK: US stocks gained on Tuesday, as investors pivoted back to technology stocks following a steep sell-off triggered by fears of Chinese artificial intelligence (AI) competition, reported Xinhua.
The Dow Jones Industrial Average rose 136.77 points, or 0.31 per cent, to 44,850.35. The S&P 500 added 55.42 points, or 0.92 per cent, to 6,067.7. The Nasdaq Composite Index increased 391.75 points, or 2.03 per cent, to 19,733.59.
Eight of the 11 primary S&P 500 sectors ended in red, with consumer staples and utilities leading the laggards by losing 1.50 per cent and 1.39 per cent, respectively. Meanwhile, technology and communication services led the gainers by going up 3.60 per cent and 1.26 per cent, respectively.
Analysts attributed the tech rally to bargain hunting and confidence in AI’s long-term profitability, despite DeepSeek’s recent disruption. “Today’s recovery is to be anticipated given the magnitude of yesterday’s selloff,” said Cody Acree, chip industry analyst at Benchmark Company. “Everything was taken down en masse without much foresight into each company’s exposure.”
Nvidia rebounded sharply, closing 8.82 per cent higher after enduring a record US$589 billion loss in market capitalisation on Monday. The rally marked a significant recovery for the chipmaker, which remains a bellwether for the technology sector.
While there were some doubts over DeepSeek’s cost claims, Sam Altman, CEO of OpenAI, called the company an “impressive model.”
”We will obviously deliver much better models and also it’s legit invigorating to have a new competitor!” Altman said in a social media post.
Meanwhile, the Federal Reserve’s ongoing two-day policy meeting also loomed over trading activity, with markets anticipating no immediate rate cuts but seeking clarity on the central bank’s 2025 monetary strategy. Fed Chair Jerome Powell’s earlier signals of caution on inflation and interest rates have kept investors wary, though optimism about a broadening corporate earnings recovery provided some support.
On other corporate news, Starbucks saw its stock up 0.37 per cent on Tuesday following stronger-than-expected quarterly earnings. The coffee chain surpassed both revenue and profit estimates, despite a fourth consecutive quarter of declining same-store sales. The company emphasised its commitment to its ongoing turnaround strategy, aiming to address the challenges impacting performance. – BERNAMA-XINHUA
