Photo by Steve Johnson on Unsplash
 

At Monday’s close, the Dow Jones Index (US30) was up 0.65%. The S&P 500 Index (US500) decreased by 1.46%. The Nasdaq Technology Index (US100) fell by 2.97%. The fall in technology stocks on Monday impacted the overall market. Shares of chipmakers and artificial intelligence-related companies fell on Monday as Chinese artificial intelligence startup DeepSeek appears to be delivering performance comparable to Western chatbots for less price. DeepSeek’s latest, released last week, is widely considered to compete with OpenAI and Meta Platforms and is now ranked number one on the Apple App Store.

Shares of artificial intelligence company Nvidia (NVDA) fell nearly 17% on Monday, wiping out $589 billion in market value and weighing down the Nasdaq Composite Tech Index as a new model from Chinese startup DeepSeek cast doubt on recent investments in AI infrastructure. Much of the current rise has been on the expectation that US companies have an exclusive advantage in AI, and they can dominate the field and make a lot of money accordingly. However, a Chinese startup is shattering this myth by proving that neural networks can be affordable and accessible. This could significantly hit US stock indices, which many experts believe are inflated due to the AI bubble.

Falling prices for crude oil, which plays a key role in Canada’s economy, are adding pressure on the Canadian dollar as market participants fear the broader implications of tariffs imposed on Canada, Mexico, and China, which could reduce global energy demand and growth. These risks, combined with the growing interest rate differential between the US and Canada, put additional pressure on the loonie, making it difficult for it to recover in the near term, especially amid expectations of a possible rate cut by the Bank of Canada.

Equity markets in Europe traded yesterday without a single dynamics. German DAX (DE40) fell by 0.53%, French CAC 40 (FR40) closed down by 0.27%, Spanish IBEX 35 (ES35) gained 0.12%, British FTSE 100 (UK100) closed up 0.02%. 

On Monday, WTI crude futures fell more than 2% to $73 per barrel, setting a one-month low. Earlier in the session, weak economic data from China, indicating a decline in factory activity, heightened fears of weaker demand from the world’s largest oil importer. These concerns were heightened by the prospect of US tariffs that could exacerbate economic growth and energy demand problems. Despite these concerns, Saudi Arabia has signaled its intention to raise oil prices for Asia, reflecting tightening global supplies due to OPEC+ production cuts and recent US sanctions against Russian oil exports.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) was down 0.92%, China’s FTSE China A50 (CHA50) was up 0.07%, Hong Kong’s Hang Seng (HK50) increased by 0.66% and Australia’s ASX 200 (AU200) was positive 0.36%. 

On Tuesday, the New Zealand dollar extended its fall to US$0.565, continuing its retreat from a five-week high as the US dollar recovered from President Donald Trump’s new tariff threats. On Monday, Trump announced plans to impose tariffs on imported microchips, pharmaceuticals, steel, aluminum, and copper to boost domestic production. Traders also remain on edge as the February 1 deadline for the first round of tariffs aimed at countries including China, New Zealand’s biggest trading partner, approaches. 

The Australian dollar weakened to US$0.625 on Tuesday, declining for a second straight session as the US dollar gained ground after fresh tariff threats from US President Donald Trump. On the domestic front, data showed business confidence in Australia improved in December. Investors are now focused on upcoming inflation data, which could heighten expectations of a potential rate cut by the Reserve Bank of Australia in February.

• S&P 500 (US500) 6,012.28 −88.96 (−1.46%)
• Dow Jones (US30) 44,713.58 +289.33 (+0.65%)
• DAX (DE40) 21,282.18 −112.75 (−0.53%)
• FTSE 100 (UK100) 8,503.71 +1.36 (+0.02%)
• USD Index 107.33 (−0.10%)

News feed for: 2025.01.28

• Australia NAB Business Confidence at 02:30 (GMT+2);
• US Durable Goods Orders (m/m) at 15:30 (GMT+2);
• US CB Consumer Confidence (m/m) at 17:00 (GMT+2).

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