The New York stock market rebounded at the start after a tech stock crash triggered by the Chinese artificial intelligence startup "DeepSeek."
Stock prices of leading AI companies, which had plummeted due to the "DeepSeek Shock," are rapidly recovering thanks to bargain-hunting.
As of 10:30 a.m. on the 28th (local time) on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, a group of blue-chip stocks, recorded a rise of 138.45 points (0.31%) to 44,852.03.
The large-cap benchmark S&P 500 index saw an increase of 32.12 points (0.53%) to 6,044.40, and the tech-heavy Nasdaq Composite index rose by 236.51 points (1.22%) to 19,578.34.
The three major indices closed mixed the previous day. The Nasdaq index fell by 3.07% as the Chinese startup DeepSeek threatened America's AI competitive edge with superior cost-effectiveness, while the S&P 500 index slid 1.46%. However, the traditional buying trend in blue-chip stocks pushed the Dow index up by 0.65%.
Among the large tech stock group known as the Magnificent 7 (M7), only Tesla showed a decline of 1%, while Nvidia, Microsoft, Apple, Alphabet (Google's parent company), Amazon, and Meta (Facebook's parent company) opened on an upward trend.
On this day, Nvidia's stock is showing a rebound in the 1% range. Nvidia's stock plummeted 16.97% the previous day, resulting in a market capitalization loss of about $600 billion in one day. This marked the largest single-day loss in U.S. stock market history. However, with Wall Street noting an "overreaction to DeepSeek," bargain-hunting is coming in.
Broadcom rebounded more than 1% after a 17.40% drop the previous day, and Oracle also shifted from a 13.79% decline to a rebound in the 2% range.
Apple's stock, which recorded a rise of over 3% despite the DeepSeek shock the previous day, continues to rise by over 3% on the same day. Apple is considered a defensive option for those concerned about an 'AI bubble burst,' as its investment in AI is relatively lower compared to other big tech companies.
U.S. defense giant Lockheed Martin predicted that its operating profit margin would fall short of Wall Street expectations, causing its stock to drop by over 7%. The largest U.S. automobile company, GM, despite reporting better-than-expected results, saw its stock plunge by over 9%. Low-cost airline JetBlue's disappointing earnings and guidance led to a drop of over 24% in its stock.
Despite poor earnings, Boeing, the world's largest aircraft manufacturer, saw its stock rise by over 6%. Cruise operator Royal Caribbean provided a strong outlook along with fourth-quarter results that exceeded market expectations, causing its stock to surge by over 10%.
The U.S. Senate voted on the nomination of Besant for Treasury Secretary the previous day, passing it by 68 to 29. President Trump nominated hedge fund manager Besant, founder of global asset management firm Key Square Group, for Treasury Secretary 17 days after winning the 2024 election on Nov. 22 last year. Wall Street expects Besant, a macro investor, to adopt a cooperative stance towards the stock market and to implement Trump's economic and tariff policies more moderately and gradually.
The Federal Reserve opened its January Federal Open Market Committee (FOMC) meeting on this day. After two days of meetings, the results will be announced on the 29th. Considering the latest inflation and employment indicators, a freeze on interest rates in January is viewed as a foregone conclusion. However, there is interest in how 'dovish' the Federal Reserve might sound regarding future interest rate directions, as President Trump has emphasized the need for rate cuts.
On the 29th, earnings reports from M7 are also anticipated. Microsoft, Tesla, and Meta will announce their fourth-quarter results, while Apple will release its earnings report the next day on the 30th.
Meanwhile, European stock markets are also showing an upward trend. The pan-European index STOXX 600 rose by 0.52%, the German DAX index increased by 0.67%, and the British FTSE index was up by 0.46%.
International oil prices are also on the rise. The price of West Texas Intermediate (WTI) crude oil for March delivery was trading at $73.38 per BARREL, an increase of 0.29% compared to the previous session, while the price of Brent crude for March delivery was up by 0.25% to $77.27 per BARREL.