Stock market today: Nasdaq jumps to chip away at DeepSeek-fueled rout as Nvidia surges over 7%

Stocks closed in the green on Tuesday as the Nasdaq and S&P 500 rebounded from their Monday’s steep sell-off, spurred by Chinese startup DeepSeek and its potentially cheaper AI model.

Bellwether Nvidia (NVDA) finished the day up nearly 9% after it shaved off a record $589 billion from its market cap on Monday.

Aided by Nvidia’s gains, the tech-heavy Nasdaq Composite (^IXIC) surged over 2%, coming off a closing loss of more than 3%. The S&P 500 (^GSPC) rose around 0.9%, while the Dow Jones Industrial Average (^DJI) gained roughly 0.3%.

The fourth volume of Yahoo Finance’s Chartbook, released on Tuesday, tells the story of markets and economy through 44 charts.

And given that we ask a broad question about what the most important chart is for investors right now, there’s sometimes a takeaway in what respondents don’t send. After the past several versions of this book included many charts making the case for interest rate cuts, there was little discussion of further easing from the Federal Reserve throughout our latest collection of charts.

Dynamic Economic Strategy CEO John Silvia’s submission helps explain why. Silvia pointed out that at 4.1%, the unemployment rate is hovering near where the Fed expects it to end this year, while private payroll growth has come off the boil. To Silvia, this shows a labor market that may be normalizing right in the are the Fed would like it to stay.

This, Silvia said, provides “less room for the Fed to ease as job/economic growth continues to move ahead and long-run full employment is on the horizon.”

With inflation relatively sticky and the labor market holding up OK, many economists right now seem more interested in Trump’s policies. Specifically the focus centers around how tariffs could impact inflation, and therefore Fed policy, before making further conclusions on the path forward for interest rates.

Check out the full Yahoo Finance Chartbook here.

Some breaking news that’s (not) related to DeepSeek or Wall Street’s AI trades: The Container Store has emerged from bankruptcy. Yahoo Finance’s Brooke DiPalma has the latest:

The struggling home goods emerged from Chapter 11 bankruptcy on Tuesday, Yahoo Finance learned exclusively.

In a release, the company said it “achieved the objectives it set for this process” in late December. That includes refinancing its short-term debt, reducing “previous long-term debt obligations,” gaining access to $40 million in new money financing, and “modifying its asset-backed lending facility to add $40 million in upsized capacity.”

Throughout the process, the business operated as usual across stores, online, and in-home services. It was also able to “[meet] its obligations to vendors, employees and customers.”

No employees were let go, but the company did close down two stores since the bankruptcy filing. The closings were separate from the bankruptcy process.

Formerly under the ticker TCSG, the company is now private after the restructuring process. For the quarter ended Sept. 28, 2024, The Container Store listed total liabilities of $836.4 million against $969 million in total assets.

Read more here.

Nvidia (NVDA) rose as much as 7% Tuesday afternoon as tech stocks rebounded from a sharp sell-off.

The AI chip giant bounced back from its 17% drop on Monday sparked by investor anxiety related to a new AI model recently launched by Chinese startup DeepSeek.

The artificial intelligence assistant, seen as more efficient and less expensive than its American-made rivals, spooked investor sentiment over AI dominance in the US and raised questions about valuations and spending.

AI-exposed power stocks attempted a rebound on Tuesday after getting crushed in the tech rout prompted by fears that energy demand for the artificial intelligence boom may be ahead of its skies.

Constellation Energy (CEG), the largest nuclear plant operator in the US was relatively flat after tumbling 21% during the prior session.

Electricity generator Vistra Corp (VST) rose more than 4% after sinking by a record 28%. Power equipment maker and servicer GE Vernova (GEV) also gained 2%, retracing a fraction of its one-day 21% drop.

AI-exposed energy stocks were recovering from a beating on Monday after Chinese startup DeepSeek released a new AI model viewed as more competitive and energy-efficient compared to its US rivals.

The sell-off rattled investors given the optimism over electricity needs to power the booming AI data center industry. Power stocks are coming off a ripping rally in 2024 and start of the year.

Paul Zimbardo, managing director for US power utilities & clean energy research at Jeffrries, said data center deployment is “very likely intact” in the medium term as the race remains “on.” The question going forward is what happens in the later part of the decade and 2030s.

“Does that trend accelerate in the future? Does it kind of stabilize and even see some moderation of demand growth out later in the decade?” asked the analyst.

Yahoo Finance’s Ben Werschkul reports:

New mixed messages this week about President Donald Trump’s implementation of tariffs are flummoxing markets and businesses hoping for quick clarity on the 2.0 version of Trump’s trade policy.

The main point of confusion is that public signals from Trump’s orbit often appear at odds with Trump himself.

The sometimes contradictory back and forth — a feature of the debate around tariffs since Trump’s win — is taking on an outsized importance with the approach of Trump’s self-imposed Feb. 1 deadline, whe he has promised to install 25% tariffs on Canada and Mexico and 10% duties on China.

Read more here.

OpenAI on Tuesday announced a new tailored version of ChatGPT designed for US government agencies, a product launch that comes as the industry is still reeling from the breakout of a cost-efficient Chinese AI startup and as President Trump has urged tech companies to stay ahead of the competition.

OpenAI says the new service, ChatGPT Gov, is meant to streamline the government’s access to its models and it will give staffers the ability to better manage their own security and compliance as agencies handle sensitive data.

“By making our products available to the U.S. government, we aim to ensure AI serves the national interest and the public good, aligned with democratic values, while empowering policymakers to responsibly integrate these capabilities to deliver better services to the American people,” the company said in a statement unveiling the new tool.

Read more about ChatGPT Gov’s product launch here.

Tech stocks led the major averages higher on Tuesday with the Nasdaq Composite (^IXIC) gaining more than 1% on Tuesday.

Apple (AAPL), an outlier during Monday’s tech rout, extended gains to rise more than 3%. Amazon (AMZN), Alphabet (GOOGL,GOOG), and Microsoft (MSFT) also rose.

AI chip heavyweight Nvidia (NVDA) rose more than 2% in early trading, retracing a fraction of its 17% plunge from the prior session.

JetBlue (JBLU) shares fell as much as 22% on Tuesday, their biggest drop since 2020 after the air carrier posted disappointing first quarter outlook for revenue per available seat mile (RASM).

For the current three month period, JetBlue forecasts revenue per available seat mile between a decline of 0.5% and an increase of 3.5%, versus estimates for growth above 4%.

JetBlue’s fourth quarter loss came in narrower than expected, at an adjusted loss per share of $0.21, versus estimates for – $0.31.

The domestic low-cost carrier also faces higher costs. JetBlue has faced a number of challenges over the past year, including a blocked merger with peer Spirit in 2024.

US home prices hit a record high in November as the pace of price increases picked up.

The S&P Case-Shiller National Home Price Index rose 3.8% from a year earlier in November on a seasonally adjusted basis, higher than the 3.6% annual increase in October.

The data captures a three-month period through November when mortgage rates were climbing toward 7%, providing little relief for would-be buyers in a seasonally slower selling season. Despite the rise in borrowing costs, the national index hit a record high for the 18th consecutive month on a seasonally adjusted basis.

Still, on a monthly basis, prices ticked up 0.4% over the prior month in November, up from October’s 0.3% monthly increase.

Brian D. Luke, head of commodities at S&P CoreLogic, said in a statement, “With the exception of pockets of above-trend performance, national home prices are trending below historical averages.”

The index tracking home prices in the 20 largest metropolitan areas gained 4.3% in November from a year earlier, compared with a 4.2% increase in the previous month, according to S&P CoreLogic Case-Shiller data. New York remained the top state for annual gains, with a 7.3% increase.

The Nasdaq and S&P 500 attempted to recover on Tuesday from a sharp tech-led rout prompted by AI worries. The Federal Reserve two-day policy meeting which started earlier in the morning was also in focus for investors.

The tech-heavy Nasdaq Composite (^IXIC) rose more than 0.4% after sliding 3% in the prior session. The S&P 500 (^GSPC) gained 0.2%, while the Dow Jones Industrial Average (^DJI) hovered near the flatline.

AI chip giant Nvidia (NVDA) rose more than 2%, attempting to recover from a 17% plunge in the prior session as the buzz around Chinese startup DeepSeek raised questions of overvaluation and spending in much of the US artificial intelligence space.

Investors are keeping a close eye on any additional tariff talk from President Trump and how that may impact economic growth.

The market now awaits the Federal Reserve’s policy decision expected on Wednesday afternoon following their two-day meeting.

Yahoo Finance’s Laura Bratton reports:

Nvidia (NVDA) stock rose 2.5% pre-market Tuesday as the AI chipmaker began to recover from a massive decline the prior day that shaved nearly $600 billion off its market cap.

Nvidia’s 17% free-fall Monday was prompted by investor anxieties related to a new, cost-effective AI model from the Chinese startup DeepSeek. Some Wall Street analysts worried that the cheaper costs DeepSeek claimed to have spent training its latest AI models, due in part to using fewer AI chips, meant US firms were overspending on artificial intelligence infrastructure.

Nvidia’s $589 billion market cap decline was the largest single-day loss in stock market history. The DeepSeek announcements drove down not only Nvidia but the market at large, with the tech-heavy Nasdaq dropping 3%. Chip stocks dropped across the board Monday but began to recover Tuesday morning.

Read more here.

Yahoo Finance’s Brian Sozzi reports:

General Motors (GM) chair and CEO Mary Barra has made her case on tariffs to President Trump.

“We’ve done a lot of scenario planning and we know the levers that we can pull to minimize any impact. But, having the opportunity to talk to the president, I really believe he wants a strong manufacturing sector because it’s good for the economy,” Barra told Yahoo Finance on Tuesday.

GM on its earnings release today said it assumes a “stable” policy environment. Its full-year 2025 EPS guidance of $11 to $12 was ahead of consensus forecasts for $10.75 and doesn’t assume any impact of additional tariffs.

Read more here.

Economic data: Durable goods orders (December); FHFA house price index (November), S&P CoreLogic Case-Shiller home prices (November); Conference Board Consumer Confidence (January); Richmond Fed manufacturing index (January)

Earnings: Boeing (BA), General Motors (GM), JetBlue (JBLU), Lockheed Martin (LMT), Logitech (LOGI), Royal Caribbean Cruises (RCL), SAP (SAP), Starbucks (SBUX), Sysco (SYY)

Here are some of the biggest stories you may have missed overnight and early this morning:

Yahoo Finance Chartbook: 44 charts that tell the story of markets and the economy to start 2025

Boeing reports $11.8B loss, largest since 2020

Black Swan’s Taleb Warns Nvidia Rout Is ‘Hint of What’s to Come’

Wall Street hopes to get rid of a bad Elon Musk bet

Trump says Microsoft is in talks to acquire TikTok

GM posts Q4 earnings beat despite EV, China challenges

How DeepSeek’s founder aims to upend the global AI order