Among the major averages, the Dow closed up 289.33 points (0.65)%, at 44,713.58. The S&P 500 ended down 88.96 points (1.46)%, at 6,012.28 while the Nasdaq settled with a loss of 612.47 points (3.07)%, at 19,341.83.
Technology stocks tumbled on earnings concerns following China's low-cost startup DeepSeek's emergence as a powerful AI model. DeepSeek's AI Assistant has overtaken ChatGPT on Apple's App Store, sparking fears that U.S. AI leaders could lose their dominance. DeepSeek's ascendance has doubt on Silicon Valley's hefty AI capex spending and the sustainability of the U.S. technical edge in artificial intelligence.
Pepsico, Apple, Amgen, Costco, Meta Platforms, Microchip, AstraZeneca, Starbucks, PayPal and Texas Instruments closed with sharp to moderate gains. Nvidia shares plunged nearly 17%. Micron tumbled 11.7%, AMD closed down 6.4%, Cisco closed lower by 5%. Alphabet, INtel, Tesla and Microsoft also ended sharply lower.
CME Group's FedWatch Tool is currently indicating a 78.0% chance rates will be lower by at least a quarter point following the Fed's June meeting. New home sales in the U.S. surged by much more than expected in the month of December according to Commerce Department. The new home sales shot up by 3.6% to an annual rate of 698,000 in December after soaring by 9.6% to an upwardly revised ate of 674,000 in November.
Asian stocks closed broadly lower on Monday as investors reacted to weak Chinese data and awaited interest-rate decisions from the U.S. Federal Reserve and the European Central Bank this week for directional cues. European stocks closed mostly weak, with the technology sector seeing a sell-off. The mood remained cautious ahead of interest rate decisions from the Federal Reserve and the European Central Bank.