Tech Stocks Surge as Markets Recover from AI Shock

Global technology stocks rebounded on Tuesday following a market shakeup by a Chinese AI model. This resurgence helped major U.S. indices like the S&P 500 and Nasdaq. Nvidia stock regained losses after the introduction of DeepSeek, a low-cost Chinese AI, challenged AI industry giants and their suppliers.

Global technology stocks saw a resurgence on Tuesday, recovering from a market disruption caused by a budget-friendly Chinese AI model that had investors questioning industry dominance. This rally in tech stocks supported key U.S. indices, with the S&P 500 rising 0.75% and Nasdaq climbing 1.7% after Monday's sharp declines led by Nvidia's 17% dive.

The catalyst for the slump, DeepSeek, a cost-effective AI from China, instigated reevaluation among investors about the dominion of AI frontrunners like Nvidia. On Tuesday, Nvidia shares bounced back, gaining 6%, as Apple climbed nearly 4%. Stuart Dunbar of Baillie Gifford remarked that despite knee-jerk reactions, the long-term potential impact of AI on the world remains vast.

Attention now shifts to upcoming earnings from tech giants, including Microsoft, Tesla, and Meta, amid expectations of probing on their investment in computing power. Broader market dynamics included European stocks stabilizing and the STOXX 600 reaching new heights. Meanwhile, trade tensions persisted, with President Trump's tariff policies influencing currency and bond markets.

(With inputs from agencies.)