Tuesday Briefing

A screen in the window of Nasdaq’s headquarters in Times Square in New York City yesterday.Credit…Bryan R. Smith/Agence France-Presse — Getty Images

China’s A.I. advances spook Big Tech investors

A.I. advances by Chinese upstarts rattled U.S. markets yesterday, wiping hundreds of billions of dollars from the leading tech indexes. Falling tech stocks also dented market indexes in Europe and Japan, and the dollar slipped against the currencies of major U.S. trading partners.

The slide came days after the Chinese A.I. company DeepSeek said it could match the abilities of cutting-edge chatbots while using a fraction of the specialized computer chips that leading A.I. companies rely on. The news prompted investors to rethink the valuations of companies like Nvidia, whose equipment powers the most advanced A.I. systems. (Here’s what to know about DeepSeek.)

The overall tech sector of the S&P 500 has had a rocky start to the year, losing about 4 percent of its value, while every other major sector has gained over the same period. Because of the tech industry’s size and influence, this has weighed on the S&P 500 index, which is up about 2 percent for the year.

Big Tech: Shares of Microsoft and Alphabet, Google’s parent company, both of which have bet heavily on A.I., fell yesterday by 2.1 percent and 4.2 percent, respectively. Oracle dropped almost 14 percent. SoftBank shed more than 8 percent during trading in Tokyo. Meta and Apple bucked the trend, posting gains.

Nvidia: Shares of the chip company plunged 17 percent, and the company lost roughly $600 billion in market value, on what was its worst trading day since the pandemic sell-off in March 2020.