| Company | Value | Change | %Change |
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The fall appears contained as at one point, the Nasdaq futures were pointing to a 1,000-point fall.
The S&P 500 also fell 1.5% after recovering from the lows, while the Dow Jones outperformed, ending with gains of close to 300 points, continuing on its merry ways, insulated from the pressure in the chipmakers as most of them are not components of the index.
After a 17% drop on Monday, Nvidia’s shares are also up 3% in extended trading. The plunge erased $589 billion from the company’s market value, the biggest in US history.
A gauge of the “Magnificent Seven” megacaps slid 2.7%. The Philadelphia Stock Exchange Semiconductor Index fell 9.15%. The Russell 2000 slipped 1%. Wall Street’s favorite volatility gauge — the VIX — soared the most since about mid-December. The Dow Jones Industrial Average of blue chips rose 0.7%.
The severity of the selloff in US assets was proportionate to the weightings of AI-enabled firms in the biggest stock indexes. Even after a recent paring to curb their influence the cohort of Nvidia, Apple Inc., Microsoft Corp., Amazon.com Inc., Meta Platforms Inc. and Alphabet Inc. account for about 40% of the Nasdaq 100. It’s roughly 30% in the S&P 500, leaving both gauges significantly exposed to concerted drops in those names.
In a rush for safety, defensive industries like consumer staples and health care were bid. Treasuries rallied, driving yields to the lowest levels this year. Haven currencies including the yen and the Swiss franc climbed. Energy firms expected to profit from unprecedented AI demand sank, led by a 21% beatdown for Constellation Energy Corp. The crypto world got hit.
The yield on 10-year Treasuries declined nine basis points to 4.53%. The Bloomberg Dollar Spot Index rose 0.1%. Bitcoin slid 2.9% to $101,481.84.
“What was shaping up to be a big week in the markets got even bigger with the disruption in the AI space,” said Chris Larkin at E*Trade from Morgan Stanley. “That could make this week’s megacap tech earnings even more critical to market sentiment.”
To Seema Shah at Principal Asset Management, valuations remain extended, and while vulnerabilities were expected this year, developments like DeepSeek highlight the need for diversification beyond the Magnificent Seven.
“I’m hoping this moment encourages everyone to look beyond tech stocks,” said Callie Cox at Ritholtz Wealth Management. “Not because the AI story is doomed, but because there are so many opportunities in unloved sectors that have been ignored for so long. The guts of the market’s foundation are still good, so it’s likely that the dip will be bought here.”
(With Inputs From Agencies.)
