US markets stabilise after Monday's tech swoon caused by Chinese AI startup

New York, Jan 28 (AP) US markets stabilised Tuesday following a wipeout a day earlier when a Chinese AI startup startled markets with its capacity to compete with American tech giants.

Futures for the S&P 500 and the tech-heavy Nasdaq ticked up 0.2% before the bell. That follows Monday's declines of 1.5% and 3.1% respectively. Dow Jones futures were down 0.1% in the early going.

Many of Monday's big losers clawed back some of their losses, including chipmaker Nvidia, which rose 3.4% in premarket after tumbling nearly 17% a day earlier. Another chip giant, Broadcom, was up 3.3% in early trading following a 17.4% decline a day earlier. Software maker Oracle, which fell 13.8% on Monday, rose 2.5% before markets opened Tuesday.

Shares of General Motors were essentially unchanged at $54.70 after the automaker swung to a loss in the fourth quarter on huge charges related to China. GM still topped profit and revenue expectations on Wall Street.

Royal Caribbean jumped 4.3% after the cruise ship operator beat Wall Street's fourth-quarter profit targets and raised its full-year 2025 profit guidance.

Boeing shares were also unchanged after the company reiterated the preliminary fourth-quarter results it released last week. The troubled aerospace giant lost $3.8 billion in the fourth quarter, bringing its losses to more than $35 billion since 2019 following the crashes of two then-new Max jets that killed 346 people.

In Europe at midday, France's CAC 40 rose 0.4%, while Germany's DAX gained 0.9% and Britain's FTSE 100 climbed 0.6%.

Japan's benchmark Nikkei 225 lost 1.4% to finish at 39,016.87. Australia's S&P/ASX 200 was little changed, inching down 0.1% to 8,399.10. Hong Kong's Hang Seng rose 0.1% to 20,225.11. Markets in South Korea, Shanghai and other parts of the region were closed for holidays.

Among technology companies in Japan, SoftBank Group Corp. stock extended its losses, plunging 5%. Hitachi Ltd. lost 6%, but Fujitsu and Sony Corp recovered. Computer chip maker Tokyo Electron sank 5.7%.

Fuji Media Holdings, rocked by a sex scandal, rose 3% after a marathon news conference overnight by its top executives that lasted more than 10 hours, in which two of them resigned to take responsibility for the scandal. Fuji's stock price has zigzagged in recent months amid Japanese magazine reports about “a problem” involving an anchorwoman and a Japanese male star. He has subsequently announced his retirement.

The shock to financial markets on Monday came from China, where an AI company named DeepSeek unveiled a large language model that can compete with US giants but at potentially a fraction of the cost.

It's unclear how much DeepSeek's announcement will ultimately shake the economy that's built around the AI industry, from the chip makers making semiconductors to the utilities hoping to electrify vast data centres gobbling up computing power.

It's a sharp turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring in would remake the global economy and deliver gargantuan profits along the way. Such stellar performances also raised criticism that their stock prices had gone too far, too fast.

A small group of seven such companies has become so dominant that they alone accounted for more than half the S&P 500's total return last year, according to S&P Dow Jones Indices. They include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla.

Their immense sizes give them huge sway over the S&P 500 and other indexes that give more weight to bigger companies.

Markets are also awaiting earnings reports later this week from Apple, Meta Platforms, Microsoft and Tesla.

In energy trading, benchmark US crude added 50 cents to $73.67 a barrel. Brent crude, the international standard, rose 48 cents to $76.66 a barrel.

In currency trading, the US dollar was unchanged at 155.41 Japanese yen. The euro cost $1.0422, down from $1.0493. (AP) SCY SCY

Source: PTI