Tech Market Turbulence: China's AI Breakthrough Rattles U.S. Dominance

Stock futures steadied as the dollar rose amidst Asia's tech sector dip, following a market impact from a Chinese AI startup challenging U.S. dominance. Nvidia faced massive losses, impacting the Nasdaq. Concerns linger about AI investments despite Nvidia's slight recovery in after-hours trading.

The U.S. stock futures remained steady while the dollar ticked higher on Tuesday, even as tech stocks in Asia faced declines. This comes after a Chinese AI startup made strides that shook faith in U.S. dominance within this booming sector. Nvidia experienced a historic market capitalization loss overnight, shedding 17% to erase almost $593 billion.

"We're witnessing the first signs of an urgent reassessment of a two-year growth narrative," said Brent Donnelly from Spectra Markets. Nvidia saw a minor uptick post-market, while Nasdaq 100 futures rose slightly. Meanwhile, Advantest fell sharply in Japan, with additional significant losses seen by SoftBank Group and Furukawa Electric.

Beyond Nvidia, losses were seen across the AI supply chain from New York to Tokyo, affecting technology suppliers, data centers, and utilities. Amid this turmoil, the CBOE Volatility Index spiked, with treasuries, yen, and Swiss francs gaining as safe-haven assets. As the Fed and ECB prepare to set interest rates, markets globally brace for potential shifts.

(With inputs from agencies.)