Tech Stocks Bounce Back Amidst AI Concerns and Tariff Tensions

Technology stocks rebounded on Tuesday, led by gains in major indices like Nasdaq and Nvidia, following a drastic drop due to a new Chinese AI model. Meanwhile, market dynamics were influenced by trade tensions, tariff plans by President Trump, and upcoming central bank meetings impacting investor strategies.

On Tuesday, technology stocks regained their footing after a sharp drop triggered by the unveiling of a low-cost Chinese AI model on Monday. The Nasdaq, boosted by a 9% rise in chip manufacturer Nvidia, added roughly 2%, demonstrating a significant recovery. Similarly, the S&P 500 and the Dow Jones Industrial Average recorded modest gains.

The initial sell-off, spurred by fears over DeepSeek's implications for AI market leaders, caused Nvidia's valuation to plunge by $593 billion. Despite these concerns, investors are focusing on upcoming earnings reports from tech giants like Microsoft, Tesla, and Meta to glean insights into future spending plans on computing power.

Concurrently, global markets navigated a complex landscape of trade tensions as President Trump reaffirmed planned tariffs on Canadian and Mexican imports. These developments nudged investors back towards the dollar, impacting other currencies and market yields. Central bank decisions and economic indicators, such as U.S. consumer confidence and oil prices, further contributed to the market's dynamic environment.

(With inputs from agencies.)