Stock Market Report: January 28, 2025

Market Overview

U.S. equity markets faced significant volatility on Monday, driven by concerns over AI competition and geopolitical tensions. The Nasdaq Composite fell 3.1%, while the S&P 500 dropped 1.5%. The Dow Jones Industrial Average bucked the trend, rising 0.65% due to gains in defensive sectors like healthcare and utilities [citation:1][citation:5].

Key Movers

Tech & AI Stocks Under Pressure

• NVIDIA (NVDA): Plunged 16.97%, losing nearly $600 billion in market value—the largest single-day drop in U.S. history. Analysts cited fears of reduced AI chip demand after Chinese startup DeepSeek demonstrated a high-performance AI model built at a fraction of traditional costs [citation:1][citation:4].
• Broadcom (AVGO) & AMD (AMD): Fell 17.4% and 6.4%, respectively, amid concerns over AI infrastructure spending cuts [citation:1][citation:5].
• Vertiv Holdings (VRT): Dropped 29.88% as investors questioned the sustainability of data center investments [citation:1].
• Apple (AAPL): Rose 3.18%, reclaiming its title as the world’s most valuable company ($3.45 trillion) after launching iOS 18.3 with default AI integration [citation:1][citation:3].

Commodities & Energy

• Crude Oil: WTI fell 2% to $73.17/barrel amid fears that Trump’s proposed tariffs could slow economic growth and energy demand [citation:9].

Notable Events

• DeepSeek’s AI Breakthrough: The Chinese startup’s $6 million open-source AI model outperformed OpenAI’s offerings, triggering a sell-off in U.S. tech stocks. Analysts warned of a potential "AI bubble" [citation:1][citation:3][citation:5].
• EU Tariff Dispute: Tesla and BMW challenged the EU’s anti-subsidy tariffs on Chinese EVs in court, escalating trade tensions [citation:1].

Outlook

Markets remain focused on:

• Federal Reserve Meeting: A 99% probability of unchanged rates, with inflation data due later this week [citation:2][citation:6].
• Earnings Reports: Meta, Microsoft, Tesla, and Apple will report this week, testing the "Magnificent Seven" dominance [citation:2][citation:5].
• Geopolitical Risks: Trump’s tariff policies and tensions over Taiwan could further destabilize markets [citation:6][citation:7].