Market Update: Impact of DeepSeek on Technology Stocks and Economic Outlook

Yesterday, news about the Chinese AI assistant “DeepSeek” caused significant sell-offs in technology companies. In contrast, industrial firms showed a more resilient trend. Analysts predict that the market capitalization of tech companies could decline by as much as $1 trillion. Impact on Chip Manufacturers The pressure on dominant chip manufacturers, particularly Nvidia, was evident. Nvidia’s shares dropped by 17% in response to the news. Despite these developments, we believe there is still not enough data to draw definitive conclusions. The potential for AI investments to be made at lower costs could undermine profit expectations in the tech sector. We think that resolving existing uncertainties will provide a clearer picture moving forward.

Earnings Reports to Watch

This week, we will closely monitor earnings reports from high-market-cap companies such as Microsoft, Tesla, Apple, and Meta. The financial results and forward-looking assessments from these firms will be crucial in determining market trends.

Global Market Overview

Today, global markets show a mixed outlook. Ahead of the Wall Street opening, U.S. futures are slightly positive, and European markets are also in the green. In Asia, South Korean stocks are performing well, while other regional markets closed in the red.

Current Commodity Prices

As of midday, gold is trading just below $2,750 per ounce. Brent crude oil is hovering around $77. Bitcoin, which dipped to $98,000 yesterday, is currently trading at $102,000. Ethereum has risen to $3,200. Key Economic Data to WatchOn the international economic calendar today, key data from the U.S. includes: December’s preliminary durable goods orders (16:30 GMT) November FHFA house price index (17:00 GMT)January’s Conference Board Leading Economic Index (18:00 GMT)

January Richmond Fed manufacturing index (18:00 GMT) We will pay close attention to core capital goods shipments, a subcategory of durable goods orders that directly contributes to economic growth. Additionally, Chinese markets will close for one week starting today due to the Lunar New Year.

Disclaimer

This report is written by Tacirler Menkul. The investment information, comments, and recommendations contained herein do not constitute investment advisory services. Investment advisory services are provided under a contract signed between brokerage firms, portfolio management companies, non-deposit-taking banks, and clients. The opinions and recommendations expressed here are based on the personal views of the authors and may not align with your financial situation or risk and return preferences. Therefore, relying solely on the information provided here for investment decisions may not yield the expected results.