U.S. stocks finished the volatile week mostly lower, although the Dow rose modestly to notch its third straight week of gains. The Nasdaq Composite experienced a particularly steep drop on Monday, driven by a sell-off in tech stocks in response to the emergence of DeepSeek, a Chinese AI developer, which released a new open-source large language model that reportedly requires much less energy and processing power than other leading AI applications, leading to competitive concerns in the broader AI space. The news led to shares of NVIDIA falling nearly 17% on Monday. Several positive earnings surprises and upbeat forward guidance, particularly from some notable large-cap tech companies (including Meta Platforms and Apple), appeared to be a tailwind for stocks late in the week and helped the major indexes recover some of their earlier losses. The Fed holds rates steady while core PCE inflation remains unchanged. President Donald Trump reiterated his plan to impose 25% tariffs on Mexico and Canada, the U.S.’s top two trading partners, by February 1, while also threatening to levy an additional 10% tariff on goods from China. US Treasuries yields fell during the week while Gold extended its record-breaking run, trading above $2800 for the first time ever. The pan-European STOXX Europe 600 Index gained 1.78%, reaching a record high as the ECB cut rates. Mainland Chinese stock markets edged lower in a holiday-shortened week. Bitcoin ended the week below $103,000.
Have a great week-end!
Charles for the team