Nasdaq, S&P 500 look to chip away at losses after DeepSeek-inspired tech rout

The Nasdaq and S&P 500 rebounded on Tuesday, following a steep stock sell-off spurred by concerns of over-confidence in Big Tech’s potential payoff from investments in AI. Investors also assessed a return to a tougher tone on tariffs from President Donald Trump, ahead of the start of a Federal Reserve meeting where the impact of his policies is likely to be discussed.

The tech-heavy Nasdaq Composite (^IXIC) gained more than 1%, coming off a closing loss of over 3%. The S&P 500 (^GSPC) rose 0.5%, while the Dow Jones Industrial Average (^DJI) rose 0.3%.

Stocks began to chip away at losses booked in Monday’s tech-led rout, which came as buzz built for Chinese startup DeepSeek’s potentially cheaper AI model. That risk to US leadership in AI raised questions about whether chipmakers and other tech names call follow through on high earnings expectations.

Bellwether chip giant Nvidia (NVDA) rose more than 2%, having plunged 17% in the previous session to erase a record $589 billion in market value.

Meanwhile, the dollar (DX=F) strengthened after renewed tariff threats from Trump that revived worries about a trade war, already in focus after a brief standoff with Colombia. Trump said he wants universal tariffs “much bigger” than the 2.5% his incoming Treasury Secretary, Scott Bessent, reportedly plans to introduce gradually.

With that risk to inflation in mind, investors are keeping a watchful eye on the Fed’s two-day policy meeting that begins later Tuesday. The central bank is expected to leave interest rates unchanged, given recent solid economic readings.

General Motors (GM) kicked off a fresh batch of key earnings updates, posting a quarter sales and profit beat as it turned the corner in its EV and China business. Boeing (BA) reported an annual loss of almost $12 billion in the wake of a strike and problems in key units.

With the DeepSeek risk in mind, focus is tighter on Big Tech earnings coming this week, with results from Apple (AAPL), Tesla (TSLA), Meta (META), and Microsoft (MSFT) on the docket.

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JetBlue stock extends decline to 22% following weak outlook

JetBlue (JBLU) shares fell as much as 22% on Tuesday, its biggest drop since 2020 after the air carrier posted disappointing first quarter outlook for revenue per available seat mile (RASM).

For the current three month period, JetBlue forecasts revenue per available seat mile between a decline of 0.5% to an increase of 3.5%, versus estimates for growth above 4%

JetBlue’s fourth quarter loss came in narrower than expected, with the airline posting an adjusted loss per share of $0.21, versus estimates for – $0.31.

The domestic low cost carrier also faces higher costs. JetBlue has faced a number of challenges over the past year, including a blocked merger with peer Spirit in 2024.
US home prices hit a record high in November

US home prices hit a record high in November as the pace of price increases picked up.

The S&P Case-Shiller National Home Price Index rose 3.8% from a year earlier in November on a seasonally adjusted basis, higher than the 3.6% annual increase in October.

The data captures a three-month period through November when mortgage rates were climbing toward 7%, providing little relief for would-be buyers in a seasonally slower selling season. Despite the rise in borrowing costs, the national index hit a record high for the 18th consecutive month on a seasonally adjusted basis.

Still, on a monthly basis, prices ticked up 0.4% over the prior month in November, up from October’s 0.3% monthly increase.

Brian D. Luke, head of commodities at S&P CoreLogic said in a statement “With the exception of pockets of above-trend performance, national home prices are trending below historical averages.”

The index tracking home prices in the 20 largest metropolitan areas gained 4.3% in November from a year earlier, compared with a 4.2% increase in the previous month, according to S&P CoreLogic Case-Shiller data. New York remained the top state for annual gains, with a 7.3% increase.
Nasdaq, S&P 500 attempt recovery from AI tech rout, Nvidia bounces 2%

The Nasdaq and S&P 500 attempted to recover on Tuesday from a sharp tech-led rout prompted by AI worries. The Federal Reserve two-day policy meeting which started earlier in the morning was also in focus for investors.

The tech-heavy Nasdaq Composite (^IXIC) rose more than 0.4% after sliding 3% in the prior session. The S&P 500 (^GSPC) gained 0.2% while the Dow Jones Industrial Average (^DJI) hovered near the flatline.

AI chip giant Nvidia (NVDA) rose more than 2%, attempting to recover from a 17% plunge in the prior session as the buzz around Chinese startup DeepSeek raised questions of overvaluation and spending in much of the US artificial intelligence space.

Investors are keeping a close eye on any additional tariff talk from President Trump and how that may impact economic growth.

The market now awaits the Federal Reserve’s policy decision expected on Wednesday afternoon following their two day meeting.
Nvidia stock begins recovery after DeepSeek AI frenzy prompted near $600 billion loss

Yahoo Finance’s Laura Bratton reports:

Nvidia (NVDA) stock rose 2.5% premarket Tuesday as the AI chipmaker began to recover from a massive decline the prior day that shaved nearly $600 billion off its market cap.

Nvidia’s 17% freefall Monday was prompted by investor anxieties related to a new, cost-effective AI model from the Chinese startup DeepSeek. Some Wall Street analysts worried that the cheaper costs DeepSeek claimed to have spent training its latest AI models, due in part to using fewer AI chips, meant US firms were overspending on artificial intelligence infrastructure.

Nvidia’s $589 billion market cap decline was the largest single-day loss in stock market history. The DeepSeek announcements drove down not only Nvidia but the market at large, with the tech-heavy Nasdaq dropping 3%. Chip stocks dropped across the board Monday, but also began to recover Tuesday morning.

Read more here.
GM CEO Mary Barra: I’ve talked to President Trump about tariffs

Yahoo Finance’s Brian Sozzi reports:

General Motors (GM) chair and CEO Mary Barra has made her case on tariffs to President Trump.

“We’ve done a lot of scenario planning and we know the levers that we can pull to minimize any impact. But, having the opportunity to talk to the president, I really believe he wants a strong manufacturing sector because it’s good for the economy,” Barra told Yahoo Finance on Tuesday.

GM on its earnings release today said it assumes a “stable” policy environment. Its full year 2025 EPS guidance of $11 to $12 was ahead of consensus forecasts for $10.75, and doesn’t assume any impact of additional tariffs.

Read more here.
Good morning. Here’s what’s happening today.

Economic data: Durable goods orders (December); FHFA house price index (November), S&P CoreLogic Case-Shiller home prices (November); Conference Board Consumer Confidence (January); Richmond Fed manufacturing index (January)

Earnings: Boeing (BA), General Motors (GM), JetBlue (JBLU), Lockheed Martin (LMT), Logitech (LOGI), Royal Caribbean Cruises (RCL), SAP (SAP), Starbucks (SBUX), Sysco (SYY)

Here are some of the biggest stories you may have missed overnight and early this morning:

Yahoo Finance Chartbook: 44 charts that tell the story of markets and the economy to start 2025

Boeing reports $11.8B loss, largest since 2020

Black Swan’s Taleb Warns Nvidia Rout Is ‘Hint of What’s to Come’

Wall Street hopes to get rid of a bad Elon Musk bet

Trump says Microsoft is in talks to acquire TikTok

GM posts Q4 earnings beat despite EV, China challenges

How DeepSeek’s founder aims to upend the global AI order