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Nvidia shares rebounded on Tuesday, as stocks steadied following a tech rout sparked by Chinese start-up DeepSeek’s advances in artificial intelligence.
Shares rose 4.5 per cent in pre-market trading following a historic fall that wiped $589bn off the US chipmaker’s market value. Monday’s losses, which dragged down the tech-focused Nasdaq Composite index by 3.1 per cent, came as Wall Street and Silicon Valley panicked over a perceived threat from DeepSeek to the continued dominance of the US in AI and the need to invest hundreds of billions of dollars in underlying infrastructure.
Futures trading indicated that US stocks were set to claw back part of the previous day’s losses. Contracts tracking the Nasdaq were up 0.6 per cent, while the S&P 500 was set to open 0.3 per cent higher, after a fall of 1.5 per cent on Monday.
In Europe, tech shares remained under pressure but broader markets were stable. The continent’s most valuable technology company ASML, which makes chip manufacturing equipment, fell 1 per cent, while ASM International shed nearly 3 per cent. Siemens Energy — which fell 20 per cent as the tech rout deepened — was up 3 per cent in early trading.
The Stoxx Europe 600 index climbed 0.5 per cent.
“Investors have been reminded that even technology stocks need to have a risk premium,” said Guy Miller, chief market strategist at insurer Zurich. “[The tech rout has been] a healthy reminder that nothing in markets, or in technological development, is a straight line.”
Japan’s tech-heavy Nikkei 225 closed down 1.4 per cent as its chipmaking industry companies continued their decline. The broader Topix, which has lower weightings for Japan’s tech exporters, was flat.
Tokyo-listed shares in SoftBank Group were hard-hit, plunging 5.2 per cent and extending their fall this week to about 12 per cent.
Analysts said SoftBank was being affected by the overnight 10 per cent plunge in shares of Arm Holdings — the US-listed chip design company in which the Japanese group holds an 88 per cent stake.
Last week, founder Masayoshi Son, accompanied US President Donald Trump at the unveiling of the Stargate joint venture, involving SoftBank, Oracle and OpenAI in a $100bn data centre investment that they said could stretch to $500bn over four years.
The US dollar strengthened by 0.5 per cent against a basket of currencies including the Japanese yen and pound sterling following the news that US Treasury secretary Scott Bessent was pushing to implement “new universal tariffs” starting at 2.5 per cent on US imports.
DeepSeek’s promise of a much lower-cost AI model has raised the question of whether Son’s photo-op announcement “marked the peak of the AI capex boom”, said Jefferies strategist Chris Wood.
In the commodities market, LME copper, demand for which is partially driven by the construction of data centres, was down 2 per cent on Tuesday to $9,088 per tonne. Nickel fell 0.7 per cent to $15,565 a tonne.
In Hong Kong, shares in Chinese tech companies recorded gains on Tuesday, although chipmaker SMIC closed down 0.4 per cent after falling as much as 2 per cent.
Hong Kong’s Hang Seng benchmark closed up 0.2 per cent on Tuesday, led higher by mainland Chinese tech companies including Tencent and Baidu, which closed up 1.4 and 3.6 per cent respectively.
