The Dow Jones Industrial Average and other major indexes traded sharply lower Monday after a Chinese tech company released a new artificial intelligence model over the weekend that could pose a threat to Nvidia (NVDA) and other U.S. companies developing AI. Nvidia stock took a severe hit on the stock market today as a result and led stocks down.
The markets got another scare during the weekend as President Donald Trump threatened to impose tariffs for Colombia regarding deportations. But that nation agreed to U.S. terms and Trump backed off his threat.
Ahead of the opening bell, Dow Jones futures fell 0.8% vs. fair value, while S&P 500 futures plunged 2.1%. Tech-heavy Nasdaq 100 futures tumbled 3.6% vs. fair value in morning trades.
The 10-year Treasury yield dropped to 4.5% early Monday. And oil prices declined, with West Texas Intermediate futures trading around $74.15 per barrel.
Among exchange traded funds, the Invesco QQQ Trust (QQQ) lost more than 3%, as the SPDR S&P 500 ETF (SPY) sold off 2% ahead of the open.
Over the weekend, it was reported China’s DeepSeek poses a threat to AI stocks as the startup’s apparent advances have raised questions over the computing power needed to develop artificial intelligence systems, a key driver for stocks in that sector. DeepSeek said it spent just $5.6 million developing its new AI model.
The Wall Street Journal reported on the AI phenomenon on Sunday.
As a result, Nvidia plunged more than 11% in premarket trading Monday. That would place shares below their 50-day line and just above the long-term 200-day line. Nvidia stock had tumbled more than 3% Friday, snapping a four-day win streak, but still held above the key 50-day line.
Find The Next Palantir Or Hot IPO In 2025 With This Tool
Stock Market Today: Trump Tariff On Colombia
In a Truth Social post Sunday, Trump directed his administration to issue “emergency 25% tariffs [against Colombia] on all goods coming into the United States,” along with other retaliatory measures in response to the South American country’s decision to block U.S. deportation planes. After one week, the 25% tariffs would then be raised to 50%.
A few hours later, Colombia said it had agreed to “all of President Trump’s terms,” as the U.S. backed off its threat to impose tariffs.
This week’s big economic news is the Federal Reserve’s interest rate decision on Wednesday. Markets currently don’t expect a rate cut until June, though the May meeting is a close call.
Later in the week, the first official estimate of fourth-quarter GDP growth arrives Thursday and, on Friday, January consumer spending figures include the Fed’s primary inflation rate, the core PCE price index.
Elsewhere, key earnings movers Monday morning include AT&T (T) and SoFi Technologies (SOFI). AT&T stock rallied more than 2%, while shares of SoFi plummeted more than 15% in premarket trading.
Other big companies reporting earnings this week include Apple (AAPL), Microsoft (MSFT), Meta Platforms (META) and Tesla (TSLA).
Nvidia Topples Apple. Now Microsoft Looks To Do The Same.
Dow Jones Eases
On Friday, the Dow Jones Industrial Average fell 0.3%, as did the S&P 500. The Nasdaq lost 0.5%. Following recent bullish action, now is a good time to check IBD’s The Big Picture for an update on the current exposure level.
Among the best companies to watch in the current stock market are Broadcom (AVGO), Meta Platforms, Netflix (NFLX) and Spotify (SPOT).
Along with Apple and Nvidia, Dow Jones components making notable moves were Amazon.com (AMZN), Microsoft and Walmart (WMT).
Meta and Walmart are featured in this Stocks Near A Buy Zone column.
Check out IBD MarketSurge‘s “Breaking Out Today” list for top growth stocks that are moving above correct buy points. Check for potential breakouts on the “Near Pivot” list. To find additional stock ideas, check IBD Stock Lists like IBD 50, Big Cap 20 and Stocks Near A Buy Zone.
