S&P 500 Falls as AI Competition and Tariff Fears Shake Market

Stock indices are sharply lower, led by a notable plunge in technology stocks. The S&P 500 is down -1.64%, impacted by concerns over AI competition from China's DeepSeek and political tariff threats, while some economic indicators display strength.

Date: 28-01-2025

AI Rating: 5

Market Overview
The stock market is experiencing a significant downturn with the S&P 500 Index down -1.64% and the Nasdaq 100 plunging -2.68%. The technology sector is particularly affected, driven largely by fears regarding competition from China's DeepSeek, which may disrupt existing AI business models reliant on high-cost chips.

Economic Indicators
Additionally, a series of economic reports indicate mixed signals. In the US, the Chicago Fed national activity index and new home sales showed improvements, which are considered supportive for stocks. The December Chicago Fed national activity index rose to a 7-month high of 0.15, exceeding expectations. New home sales also posted a +3.6% month-over-month increase, surpassing projections.

Earnings Season Impact
As earnings season progresses, investors are looking toward the results of major technology companies. Analysts forecast S&P 500 earnings growth of +7.5% year-over-year for Q4, suggesting that better-than-expected earnings could stabilize or lift market sentiment.

Stock Reactions
Specific stock movements reflect the broader market trends: major chip manufacturers such as Marvell Technology (MRVL), Broadcom (AVGO), and Nvidia (NVDA) are facing declines of over -12%, highlighting the direct impact of AI competition concerns on these firms. In contrast, AT&T (T) enjoyed a rise of +5% after reporting Q4 adjusted EPS of 54 cents, which beats consensus estimates.

Stocks: MRVL AVGO NVDA T AKRO PEG SOFI ORCL AMT KHC