Currency Shifts Amid Tech Stock Selloff

Amid a selloff in tech stocks and Chinese AI developments, the Japanese yen and Swiss franc rose, while the U.S. dollar weakened. Investors sought safe havens like government bonds. Nvidia led U.S. technology stock declines. Market reactions reflect concerns over AI costs and trade tensions.

The Japanese yen and Swiss franc saw gains as the U.S. dollar experienced losses against major currencies on Monday. This shift occurred amid a tech stock selloff, sparked by a Chinese startup's unexpected launch of a free open-source AI model.

The AI model, developed by China's DeepSeek, utilized lower-cost chips and less data. This innovation challenges the prevailing AI investment trend, which had previously buoyed U.S. tech stocks, notably chipmaker Nvidia. Consequently, Nvidia's shares fell sharply, affecting broader tech stock performance.

Amidst these market dynamics, the dollar weakened while investors gravitated toward safe-haven assets. The yield on the 10-year U.S. Treasury note dropped, and the S&P 500 saw significant declines. These movements also intersected with ongoing trade concerns, as speculation swirled around potential tariffs impacting currencies globally.

(With inputs from agencies.)