The current Wall Street environment
The trading day on Wall Street opens slightly higher, after the heavy sell-off of technology stocks that took place yesterday. The concerns stemmed from a new artificial intelligence model developed by the Chinese startup DeepSeek, which could challenge the technological supremacy of the United States thanks to its cost-efficiency. This development has triggered fears among investors, leading to a dramatic drop in the shares of companies like Nvidia, which saw a 16.86% drop, closing at 118.575
dollars.
Nvidia’s rebound and the main indices
Despite the heavy drop, Nvidia attempts a rebound, gaining 1.7% at the opening. This marks the biggest percentage drop since the March 2020 markets and the biggest loss in terms of market capitalization, amounting to nearly 600 billion dollars. However, Nvidia described the development of DeepSeek as an ‘excellent development for AI’, suggesting that the competition could stimulate further innovation in the
sector.
The main Wall Street indices show signs of recovery: the Dow Jones rose by 14.65 points (+0.03%), the S&P 500 rose by 5.33 points (+0.09%) and the Nasdaq grew by 44.65 points (+0.23%). This partial recovery may indicate some market resilience, despite global uncertainties
.
Impact of economic and geopolitical news
In addition, WTI oil at Nymex registered an increase of 1.44%, reaching 74.22 dollars per barrel. However, in December, orders for durable goods in the United States fell by 2.2%, disappointing growth expectations. Excluding the transport sector, orders increased by 0.2%, suggesting some stability
in other sectors.
In a changing geopolitical environment, the Dutch bank ING has declared the sale of its operations in Russia to Global Development JSC, thus concluding its presence in the country. This transaction, expected to be completed by the third quarter of 2025, will have a negative impact of 0.7 billion euros on the bank’s profits, highlighting the challenges that European companies face in a climate of
geopolitical uncertainty.
Future prospects for the European economy
In the third quarter of 2024, the Eurozone saw a 0.8% increase in per capita consumption and 0.4% in income. The European Union as a whole recorded a similar increase in consumption and a 0.6% increase in incomes. These data, reported by Eurostat, reflect gradual but steady economic growth across the region, suggesting that, despite the challenges, there are signs
of recovery.
Finally, the Tokyo Stock Exchange closed lower, influenced by sales on chip and heavy industry securities. Nikkei lost 1.4%, while Topix remained unchanged. The shares of Advantest, SoftBank Group and Mitsubishi Heavy Industries recorded significant losses, while the real estate sector sees increases with Sumitomo Realty & Development and Seibu Holdings growing. This scenario highlights the volatility of global markets and the importance of monitoring economic trends to make informed decisions
.