NASDAQ SINKS, S&P 500 TUMBLES As AI fears Rock Tech Shares

Housing activity for new housing construction was collected in December, even when the mortgage rates remained high during the month.

Sales of new homes rose 3.6% in December to a seasonal adjusted rate of 698,000 units, up from November’s revised rate of 674,000, according to Census Bureau data Published Monday. It exceeded the Bloomberg consensus expectations to a pace of 672,000.

Some Housepieces have trouble committing because borrowing costs remain expensive. Mortgage rates hovered about 6.9% in December. And they continue to stay around the same interval this year, just under 7%.

Increased prices have been pushing some builders to sweetness the agreement for house hunters facing the cost of affordable prices.

Dr. Horton (DHI) CEO Paul J. Romanowski told investors and analysts in the earnings peel last week, “to help spur demand and address affordable more of our smaller floor plans. “

Still, buyers who would be with high housing prices. The median sales price of new homes rose to $ 427,000 from $ 402,600 in December.

AI-Exposed power stores were swept away with tech sales after Chinese start-up Deepseek raised questions about AI dominance and expenses in the United States.

Constellation Energy (CEG), the largest nuclear plant operator in the United States, tumbled a record 17%, while Peer Vistra Corp (VST) dropped 21%. Nuclear Power Start Oklo (Oklo) also condemned 21%.

All three shares hit all time heights last week, as shares in the energy companies needed to operate data centers have increased thanks to AI-Optimism.

Nasdaq tumbled on Monday in the midst of growing skepticism towards American artificial intelligence dominance after Chinese AI starting Deepseek got a lot of attention over the weekend.

The technical-heavy Nasdaq composite (^IXIC) sank more than 3.5%, while the S&P 500 (^gspc) slid over 2%. Dow Jones Industrial Average (^DJI) dropped 0.5%or more than 200 points.

Deepseeks newly launched product, which is reportedly more effective and requires less chips than AI models from Open AI or Meta (Meta), have raised questions about the US position in AI. It has also led to a reconsideration of valuations, including chipleder NVIDIA (NVDA), whose stock sank as much as 13%.

Other chip -related stocks fell. Semiconductor equipment manufacturer ASML (ASML) lost more than 8%, while arm (arm), Broadcom (AVGO) and Micron Technology (MU) were also hammered.

Wall Street analysts pushed back toward the market reaction.

“I don’t think Deepsek is doomsday for AI infrastructure,” Stacy Rasgon, CEO and senior analyst at Bernstein, told Yahoo Finance.

“The models they built are amazing – they are really – and they have drawn a number of handles on efficiency. But what they are doing are also not miraculous or unknown to other top AI scientists or AI laboratories that are out there,” he added.

Before Sunday night Rutures in Futures, Investor turned attention square to fear of what China’s Deepseek AI could mean for the future of the US-centric AI investing boom, so this last weekend President Trump reminded investors that the tariffs are still at the top of his agenda.

Although a back and forth between the White House and Colombia saw the South American nation ultimately accept an agreement to take on migrants deported from the United States to avoid immediate 25% tariff rates on exports bound to the United States, the speed, as The president traded is the most important pickup for investors.

“Tariffs are coming,” wrote Neil Shearing, Group Manager Economist at Capital Economics in a note on Monday.

“It seems to be one of the most important takeaways from an extraordinary week that began with the relief that the new president’s opening address skipped customs but was followed by a stream of threats from Donald Trump to start traveling Tasks on leading trading partners – and ended up with reports suggesting that duty could be imposed on Mexico and Canada as soon as this weekend.

“All of this has poured some cold water on the idea, still lurking in some parts of the market that the threat of imposing duty -to -core forecasts that they could soon be imposed relative.”

Trump’s first week in the office, like Shearing Notes, was met with relief from investors as Trump refused to impose new tasks for major trading partners in a performing act on Monday.

The president later set a deadline for February 1 to take firmer actions.

How tariffs have been encapsulated with, for example, the fate of Tiktok symbolizes is more important.

Tariffs are the best way for an investor trying to understand Trump’s thinking at any given time to get a fixed answer.

One of the biggest discussions among investors in the last two years has been about how concentrated the S&P 500 has become.

This means that the percentage of the value of the total index constituted the largest 10 companies are at a record high, as we see on the chart below from Truist Wealth’s Keith Lerner, published earlier this month.

Of course, there is nothing bad about market concentration.

The most important long-term driving force for stock prices is earnings growth, and the largest companies on the market-the magnificent seven, in particular-have been the biggest contributors to earnings growth since AI boom in that way through this year.

Actually expect Wall Street Mag 7 -earnings growth to Reaccelerate In the second half of this year.

And what markets deal with is not what happens today, but what investors think will happen tomorrow. Not just the change rate, but the expected change in change speed.

So when these expectations are upset or even questioned, as the most fair characterization of fear of Deepseek’s capabilities, we get reactions like what we see on stocks this morning.

Many companies and industries will see unexpected threats to their competitive status come and go over time.

Investors will constantly re -evaluate their embedded assumptions about earnings growth and, in turn, re -evaluate the terminal value of a given company’s future cash flow when reduced to the present.

It just happens that this process plays out Monday morning for the market’s largest companies, which has never played a bigger role in the design of the overall stock market direction. And then a few pointed questions end up taking a trillion dollars from the value of the stock market.

Nvidia (NVDA) gets pummelet pre-market with 10% on fear of China-based Openai Rival Deepseek. The concern? Deepseek allegedly developed its powerful new large language model using far fewer advanced chips than US rivals use.

I want more to say about this on opening bid -podcast -episode falling on Yahoo Finance this morning. But the reaction definitely seems excessive.

The notion that Meta (Meta) will suddenly turn its billions of dollars spent on AI-Infrastructure-driven by NVIDIA chips-works long-term. Can you also trust the claims from Deepseek? And in the end, Deepseek’s alleged progress is unlikely to change the demand background for Nvidia this year – if at all.

Good to really question this type of news thoroughly.