U.S. stocks rebound one day after Nvidia-led AI rout, Nasdaq rises 1%: Live updates

All eyes were on Nvidia in Tuesday’s trading with the major averages moving instep with the AI bull market leader’s intraday fluctuations. Nvidia was up 6% in a rebound that didn’t appear to have much momentum.

In the prior session, Nvidia lost 17%, or almost $600 billion in market value — the biggest ever one-day drop in value for a U.S. company. Tech peers Broadcom and Oracle similarly rose 1% and 3%, respectively, following steep losses Monday.

The DeepSeek AI threat came to a head on Monday following social media buzz over the weekend. The Chinese startup last month unveiled a free open-source large language model that it says took less than $6 million to build. The development spurred worries around Big Tech’s investment into AI that’s been fueling the run in chipmakers, primarily Nvidia. DeepSeek, which is open-sourced and supposedly powered by a chip set-up that costs a fraction of other leading AI models, surpassed rival OpenAI on Monday to become the most-downloaded free app in the U.S. on Apple’s App Store.

“On balance, the news from DeepSeek introduces an element of uncertainty into the marketplace that perhaps we didn’t have there a couple weeks ago,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, told CNBC. “Clearly, if you can provide products at a lower cost point, that changes the investment thesis and perhaps puts some pressure on valuations, but we still have a favorable bias toward technology.”

Investors hoped for Nvidia to remain in the green to shore up confidence in the AI trade, which has lifted not only shares of chipmakers in the last year, but also far-reaching parts of the market like power producers.

Investors’ attention is turning toward corporate earnings due this week. A slate of Magnificent Seven companies will report in the coming days, with Meta Platforms, Microsoft, Tesla and Apple due later this week.

The Federal Reserve will also make its latest decision on interest rates Wednesday. Wall Street believes it’s a near certainty that the central bank will halt its rate-cutting campaign and keep rates steady this week. What’s not known is how many rate cuts Fed chief Jerome Powell will signal are in the cards for this year.