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By Lawrence Delevingne and Alun John
BOSTON/LONDON (Reuters) -Technology stocks regained some ground on Tuesday with chipmaker Nvidia up about 2.5% in early trading, a day after it suffered the biggest one-day market capitalization loss in history, and traders moved back out of safe-haven currencies into the dollar.
On Wall Street, the mood was calmer than it was on Monday, with the S&P 500 up about 0.5% and the Dow Jones Industrial Average about 0.4% higher. The tech-heavy Nasdaq added more than 1%. [.N]
Nasdaq shares tumbled on Monday as chip giant Nvidia dived 17%, losing nearly $593 billion of its value in the biggest one-day market capitalization loss in history. Behind the rout was the emergence of a low-cost Chinese artificial intelligence model, DeepSeek, which made investors question the dominance of AI bellwethers and their suppliers, which has sent shares of tech companies and chip firms soaring.
“We think the selling is overdone,” Wells Fargo Investment Institute strategists wrote in a note late on Monday. “DeepSeek appears to have achieved competitiveness through innovative techniques, and we think there is room for U.S. companies to adjust their training processes.”
Investors’ reassessment of developments in the AI sector will also heighten investor interest in this week’s earnings at Microsoft, Tesla and Meta. Executives can expect to be asked whether they still plan to spend so much on computing power.
Tuesday’s earnings highlight was Boeing whose shares rose about 6% even after the plane maker reported its biggest annual loss since 2020, because investors saw the report not as bad as they had feared.
European tech stocks stabilized Tuesday, and the broad STOXX 600 share benchmark hit a new intraday high, a sign how strongly shares have been performing in recent weeks. [.EU]
But it was not all calm, as selling pressure remained in Japan for a second day with Nvidia supplier Advantest now down 19% in two days. [.T]
DON’T FORGET TARIFFS
While DeepSeek gave investors something to think about other than President Donald Trump’s tariffs and other policies, trade tensions remained in the mix, and also supported the dollar and drove investors back out of Treasuries.
New U.S. Treasury Secretary Scott Bessent is pushing for a gradual rise in universal tariffs starting from 2.5%, and potentially up to 20%, the Financial Times reported, and Trump later said that he wanted “much bigger” tariffs than 2.5% and was considering targeted duties on products, such as steel, copper and semiconductors.