Tech Stocks Rebound After AI Startup DeepSeek Rattles Markets

Nvidia and other tech leaders recover from historic losses as investors assess the impact of DeepSeek's AI breakthrough.

Nvidia shares surged nearly 9% on Tuesday, recovering part of Monday's 17% loss, which wiped $600 billion from its market value — the largest single-day loss in U.S. market history.
The sell-off was triggered by Chinese startup DeepSeek unveiling its cost-efficient R1 AI chatbot, raising questions about the high investments in U.S. AI development.
Major U.S. indexes rebounded, with the Nasdaq gaining 2%, the S&P 500 rising 0.9%, and the Dow Jones climbing 0.3% after Monday's tech-driven declines.
Analysts suggest the market overreacted to DeepSeek's announcement, with some doubting the startup's cost claims and others predicting long-term benefits for the AI sector.
Investors now turn their attention to the Federal Reserve's policy meeting, where rates are expected to remain steady, and Chair Jerome Powell's comments will be closely watched.