Global stock markets showed mixed results on Tuesday, with trading light due to the Lunar New Year holiday. Wall Street’s tech giants took a hit after a Chinese competitor raised concerns about the ongoing hype around the artificial intelligence market.
In Europe, France’s CAC 40 dipped 0.2% to 7,894.05, while Germany’s DAX rose 0.3% to 6,047.75. Britain’s FTSE 100 climbed 0.2% to 8,522.94. In the U.S., futures were mixed, with Dow futures falling 0.2% to 44,803.00, and S&P 500 futures edging slightly higher.
In Asia, Japan’s Nikkei 225 dropped 1.4% to close at 39,016.87, while Australia’s S&P/ASX 200 slipped 0.1% to 8,399.10. Hong Kong’s Hang Seng gained 0.1% to 20,225.11. Markets in South Korea, Shanghai, and other parts of the region were closed for holidays.
In Japan’s tech sector, SoftBank Group saw its stock drop 5%, Hitachi Ltd. lost 6%, and Tokyo Electron fell 5.7%. However, Fujitsu and Sony Corp. managed to recover some ground.
Fuji Media Holdings saw its stock rise by 3% after its top executives held a lengthy press conference lasting over 10 hours, during which two executives resigned to take responsibility for a recent sex scandal. The company’s stock had been fluctuating in recent months following reports from a Japanese magazine about a “problem” involving an anchorwoman and a Japanese male celebrity. The celebrity in question has since announced his retirement.
Financial markets were rattled by news from China, where AI company DeepSeek unveiled a new large language model that could rival U.S. tech giants, potentially at a much lower cost.
It remains uncertain how much of an impact DeepSeek’s announcement will have on the broader economy, which has become heavily dependent on the AI industry. This includes everything from chip makers producing semiconductors to utilities powering massive data centers that require enormous amounts of computing power.
The announcement marks a significant shift for AI companies, which had surged in recent years due to expectations that heavy investment in the sector would transform the global economy and generate enormous profits. However, this growth has also sparked concerns that their stock prices had increased too rapidly.
A small group of seven companies has become so influential that they accounted for over half of the total return of the S&P 500 last year, according to S&P Dow Jones Indices. These companies—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla—have immense market capitalizations, giving them significant influence over the S&P 500 and other indexes that prioritize larger companies.
Markets are also waiting for earnings reports later this week from Apple, Meta Platforms, Microsoft, and Tesla.
In energy markets, U.S. crude oil rose by 63 cents to $73.80 per barrel, while Brent crude, the international benchmark, increased by 73 cents to $77.81 per barrel.
In currency trading, the U.S. dollar strengthened against the Japanese yen, rising to 155.66 yen from 154.51 yen. The euro decreased in value, dropping to $1.0431 from $1.0493.