4:25pm: Tech rebound lifts Nasdaq
Wall Street closed higher on Tuesday following a rally driven by a recovery in technology and AI-related stocks.
The Nasdaq surged 2%, or 392 points, to close at 19,734, leading a broad market rally as tech stocks rebounded from Monday's AI-driven selloff.
The S&P 500 climbed 0.9%, or 55 points, to end at 6,068, while the Dow Jones Industrial Average gained 0.3%, or 137 points, finishing at 44,850.
Nvidia shares jumped over 5%, regaining some of the 17% drop from the previous session, which had erased $589 billion in market value. Other tech giants like Apple (AAPL), Alphabet (GOOGL, GOOG), and Microsoft (MSFT) also posted gains, contributing to the Nasdaq's outperformance.
Investors are now focused on the Federal Reserve's two-day policy meeting, which began earlier in the day, with eyes on potential changes to interest rates and the economic outlook.
3.10pm: A teaser from Microsoft and OpenAI
A day ahead of Microsoft's earnings, OpenAI chief exec Sam Altman has just put out a tweet saying the next phase of the pair's partnership "is gonna be much better than anyone is ready for".
The teaser message is accompanied by a selfie from Altman with Microsoft boss Satya Nadella looking very pleased with themselves and/or they've got an exciting secret they're desperate to share.
next phase of the msft x oai partnership is gonna be much better than anyone is ready for!! pic.twitter.com/LL6rUDDy50
— Sam Altman (@sama) January 28, 2025
2:45pm: US markets "climb wall of worry"
After Monday's $1 trillion U.S. stock market rout driven by DeepSeek AI, a modest rebound is underway," says Axel Rudolph, senior technical analyst at online trading platform IG.
"Investors were bargain hunting US stocks following Monday's sharp sell-off in the Nasdaq 100 and S&P 500, leading to a rebound despite US durable goods orders unexpectedly falling," Rudolph commented.
US house prices rose by the expected 4.3% year-on-year in November, which had "little impact" on the markets, the analyst noted.
12:40pm: Nvidia and AI stocks regain ground
The Nasdaq is leading the midday market rebound, surging 1.7% as tech stocks rebound from yesterday's selloff.
The S&P 500 is following suit with a 0.8% gain, while the Dow Jones Industrial Average is up 0.3%.
Wall Street’s recovery comes after Monday's tech-driven decline, which was sparked by concerns over AI investments and the emergence of a more affordable AI model from Chinese startup DeepSeek. Nvidia shares have risen by approximately 1.5%, partially recovering from yesterday's dramatic 17% drop.
Investors are also closely watching the Federal Reserve's meeting, which begins today, and assessing potential shifts in trade policies following President Donald Trump's recent comments on tariffs.
11:45am: Nvidia regains some ground
Nvidia Corp (NASDAQ:NVDA, ETR:NVD) edged higher on Tuesday as the week's early global tech sell-off appeared to peter out.
Having been the victim of heavy selling over jitters sparked by the release of DeepSeek’s artificial intelligence bot last week, shares ticked up 0.7% to reach US$119.21 early on.
Shares had dropped by almost 17% on Monday, sending Nvidia’s market cap spiralling by nearly US$600 billion.
Swissquote Bank analyst Ipek Ozkardeskaya noted Monday’s sell-off may have been “overdone”.
“There are reports praising DeepSeek’s performance, some experts say it’s impressive, others say it’s disruptive, and Nvidia itself said that the company came up with something ‘excellent’ – using a lot of its less advanced chips.
“But beyond the fact that the company used less advanced and cheaper Nvidia chips to build its model, there are a lot of unanswered questions about DeepSeek, including whether its model could be integrated and used by other applications and whether the company really built a model for less than US$6 million.
“DeepSeek looks like it made something that already existed for a cheaper price. But it did not come up with an end product that did not exist.”
9.42am: Wall Street gains as tech sell-off withers away
Wall Street enjoyed a brighter start on Tuesday after technology stocks faced a hammering earlier in the week.
The Nasdaq edged up 0.3% after the opening bell, as the S&P 500 ticked up by 0.2%.
Both remained well off Friday’s closing levels though, having dropped by 3.1% and 2.5% respectively on Tuesday as their exposure to a tech sell-off, sparked by China’s DeepSake, weighed.
Nvidia Corp, having shed almost 17% and US$600 billion in value on Monday, edged up 1% as trading got underway.
The Dow Jones moved just above the mark in the meantime, placing the index on course for consecutive gains to kick off the week.
Among reporters, Boeing Co jumped 5.3% early on after unveiling anticipated hefty losses for the fourth quarter but citing progress in stabilising operations.
General Motors Co slumped 7.6% as news of expectation-beating earnings were clouded by wider woes around the US auto industry and billions in charges to restructure its Chinese operations and stop funding its Cruise robotaxi business.
6.47am: Stocks to regain ground
Wall Street looked set to regain ground slightly ahead of Tuesday’s opening bell as a global technology stock sell-off lost momentum.
Futures had the Nasdaq up 0.6% in pre-market trading, following Monday’s 3.1% drop, while the S&P 500 was seen 0.3% higher, after declining 1.5%.
The Dow Jones appeared on course to just top the mark and build on a 0.7% gain seen on Monday.
Despite Nvidia Corp’s near-17% drop, which took almost US$600 billion off its valuation, only a handful of the index’s 30 constituents fell into the red on Monday, shielding it from the wider sell-off which hammered its counterparts.
This had been sparked by the release and news of growing popularity around Chinese-based DeepSeek’s far cheaper and more efficient artificial intelligence bot.
Scope Markets analyst Joshua Mahony noted attention would now shift to a string of big-tech earnings this week as a result.
Meta Platforms Inc, Microsoft Corp and Tesla Inc are all in line to report on Wednesday, before Apple Inc on Thursday.
“Undoubtedly, we will see many adjust their statements to shed light on how new developments could drastically reduce capital expenditure,” Mahony said.
“However, it is important to weigh up the possibility that Nvidia chips remain a key component of the DeepSeek repertoire, and thus the idea that all development can be done on a shoestring budget remains unproven for the time being.”