Tech Stocks Recovering
Following a sharp drop lower on Monday as traders reacted to the DeepSeek China AI shock, US tech stocks were seen recovering yesterday. The NASDAQ pushed higher by more than 2% on the day, now having recovered more than 50% of the gap lower this week. Gains in index leaders Nvidia drove most of the recovery with the chipmakers stock bouncing back following a record meltdown on Monday. Nvidia lost 17% on Monday, equivalent to a market value of $593 billion, making the largest single-day loss for any company in history.
AI Volatility Era?
While tech stocks are recovering, the market is still down from Friday’s close and the violent reaction to the DeepSeek news shows just how vulnerable inflated tech stocks are to negative news. The big fear now is that China will continue to rock the market with further developments in the AI field. News that it’s DeepSeek AI software runs at a lower cost and lower data usage than world leader Chat GPT has been a big wakeup call for tech investors who have gone all in on Nvidia and the recent AI gold rush in the west. The risk now is that Nvidia and the wider tech sector (particularly AI linked stocks) could move into a more volatile phase with similar reaction to further news from China.
Technical Views
Nasdaq
For now, the index remains caught between support at the 20,668 level and resistance at 22,132. Given the broader bull trend, the focus remains on an eventual break higher while support at 20,668 holds. Below there, however, 19,955 is the next support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.