[New York Stock Market] Rebound Overcoming 'Deep Sea Shock'... Nasdaq Up 2.03%

Nasdaq rebounds after DeepSeek-driven plunge the previous day
Nvidia soars 8.82%... Broadcom, Oracle also rise
FOMC interest rate decision set for the 29th
Big tech earnings this week: Meta, Microsoft, Tesla, Apple

The three major indices of the U.S. New York stock market all rose on the 28th (local time). The market, which had plunged the previous day due to fears of an AI bubble burst triggered by the shock from Chinese AI startup DeepSeek, recovered its losses within a day as bargain hunting emerged. Nvidia, which had plummeted nearly 17% the day before, surged about 9% on this day.

On this day in the New York stock market, the Dow Jones Industrial Average (Dow) focused on blue-chip stocks closed at 44,850.35, up 136.77 points (0.31%) from the previous trading day. The S&P 500, centered on large-cap stocks, rose 55.42 points (0.92%) to 6,067.7, and the Nasdaq, focused on technology stocks, jumped 391.75 points (2.03%) to close at 19,733.59.

By individual stocks, Nvidia jumped 8.82%. The previous day, Nvidia’s market capitalization had decreased by $600 billion, marking the largest single-stock market cap loss in U.S. history within one day. However, this was insufficient to fully recover the previous day’s 16.86% drop. Broadcom rose 2.57%, and Oracle increased by 3.61%.

The previous day, the New York stock market was shaken by the DeepSeek shock, with the Nasdaq index plunging more than 3%. The Chinese AI startup DeepSeek’s open-source AI model 'R1,' released on the 20th, was evaluated to outperform some models from OpenAI, the developer of 'ChatGPT,' sparking concerns about overheated AI investments. When DeepSeek revealed that the development cost was less than $6 million, forecasts emerged that demand for AI semiconductors, power, and data centers might not be as large as initially expected. Concerns were also raised that U.S. AI dominance could be shaken.

Wall Street’s outlook on the future direction of technology stocks, especially those related to AI, remains divided.

Thomas Martin, Senior Portfolio Manager at Globalt Investments, analyzed, "As people try to unwind these (tech stocks), we are facing some uncertainty. The themes that more processing, data centers, and power are needed in the AI era remain intact, but confidence has been shaken."

Kenny Polcari, Senior Market Strategist at Slatestone Wells, explained, "Some people might have been a bit uneasy, but there is no need to panic. Buyers on the previous day liked the opportunity to purchase stocks at a huge discount."

Investors’ attention is focused on the U.S. Federal Reserve’s (Fed) interest rate decision the following day. The Fed is expected to keep the benchmark interest rate unchanged at the current level of 4.25?4.5% during the first Federal Open Market Committee (FOMC) regular meeting of the year, held over two days starting this day. Attention is also on what message Fed Chair Jerome Powell will deliver at the press conference the next day, especially after former U.S. President Donald Trump publicly pressured for a rate cut last week.

Big tech earnings announcements continue. On the 29th, Meta, Microsoft (MS), and Tesla will release their earnings, followed by Apple on the 30th.

Government bond yields remain steady. The yield on the 10-year U.S. Treasury note, a global bond yield benchmark, is at 4.53%, and the yield on the 2-year U.S. Treasury note, sensitive to monetary policy, is at 4.19%, both moving around the previous day’s levels.

International oil prices closed higher. West Texas Intermediate (WTI) crude oil rose $0.60 (0.82%) to $73.77 per barrel, and Brent crude, the global oil price benchmark, increased $0.41 (0.53%) to $77.49 per barrel compared to the previous day.