The US stock market had a volatile week, ending with a broad sell-off on January 31 due to news of President Donald Trump's new tariffs and a decline in technology stocks.
 |
| The US stock market had a volatile week, ending with a broad sell-off on January 31. (Source: Bloomberg) |
At the end of the week, the S&P 500 index fell 0.50% to 6,040.53 points. The Dow Jones industrial average fell 0.75% to 44,544.66 points. The Nasdaq Composite technology index also lost 0.28% to 19,627.44 points.
The decline came after the White House announced that President Trump’s tariffs would take effect on Saturday (February 1, 2020). They include a 25% tariff on goods from Canada and Mexico and a 10% tariff on Chinese goods. The news sparked an immediate negative reaction from stocks linked to those markets.
Despite the decline last week, Wall Street's major indexes still recorded growth in January 2025. Specifically, the S&P 500 increased 2.7%, the Nasdaq increased 1.6% and the Dow Jones outperformed with a gain of 4.7%.
Tom Hainlin, senior investment strategist at US Bank Asset Management Group, said the initial market reaction was similar to the reaction to news earlier this week about DeepSeek, a Chinese artificial intelligence (AI) startup that launched a low-cost generative AI model that could impact America’s dominance in the industry. Hainlin said investors should wait for details on specific policies before reacting further.
Another notable factor is economic data released on January 31 showing that the US personal consumption expenditures (PCE) price index - the US Federal Reserve's preferred inflation measure - increased 0.3% month-on-month in December 2024 and increased 2.6% compared to the same period in 2023. The figure is higher than the 2.4% increase in November 2024 and raises concerns about persistent inflation and potential implications for Fed policy.
The market declines on Friday also followed disappointing fourth-quarter 2024 results from energy giants Chevron and Exxon Mobil, with their shares falling 4.6% and 2.5%, respectively. However, it wasn’t all negative earnings news, with Apple reporting quarterly earnings that beat expectations on Jan. 30.
Overall, the week’s action was largely driven by the emergence of DeepSeek, a Chinese startup that has developed AI models that are said to be more efficient than those in the U.S. News of DeepSeek sparked a significant sell-off in tech stocks on Monday, sending the S&P 500 down 4.6% for its worst week since early September.
Nvidia, a giant in the AI chip industry, saw its stock price fall 16% weekly after falling 17% on Monday alone. The decline means Nvidia has lost $552 billion in market capitalization in the past week.
No one could have predicted DeepSeek’s emergence, said Rob Arnott, founder of investment advisory firm Research Affiliates. This adds to the uncertainty surrounding the prospects of major technology companies such as Nvidia and Microsoft, raising questions about their competitive advantage.
Arnott also warned that the AI “craze” may have pushed stock valuations too high. Scott Wren, senior global market strategist at Wells Fargo Investment Institute, agreed that the market would need a correction in the next phase.
Meanwhile, Jay Hatfield, CEO of Infrastructure Capital Advisors, expressed optimism about the next phase, calling this week’s big sell-off “overdone.” He said that the overblown concerns about DeepSeek are fading and will fade further when Amazon and Google report their earnings next week.
Investors will be closely watching the implementation of the announced US tariffs and economic data next week for further guidance on the market outlook.
Source: https://baoquocte.vn/chung-khoan-my-choang-vang-vi-thue-quan-va-con-dia-chan-deepseek-302835.html
Comment (0)