Last Updated: 4:01 PM EST
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Tech-heavy stock indices finished today’s trading session down after China’s DeepSeek revealed a new AI model that outperformed that of American companies. Indeed, the Nasdaq 100 (NDX) and the S&P 500 (SPX) fell 2.97% and 1.46%, respectively
Separately, the U.S. new home sales market ended 2024 on a strong note, with sales rising 3.6% month-over-month to 698,000 in December. This beat the consensus estimate of 672,000 and marked a significant improvement from the revised November figure of 674,000.
When zooming out, new single-family home sales were up 6.7% year-over-year in December. For the full year 2024, an estimated 683,000 new homes were sold, representing a 2.5% increase from 2023. These numbers suggest a resilient housing market despite economic uncertainty.
The median sales price of new homes sold in December was $427,000, up from $402,500 in November. The average sales price also jumped to $513,600 from $485,000 in the prior month. Meanwhile, the inventory of new homes for sale stood at 494,000, which represents an 8.5-month supply at the current sales rate.
However, U.S. Building Permits missed expectations, with a print of 1.482 million compared to the forecast of 1.483 million. This was a decrease from the prior month’s report, which came in at 1.493 million, equating to a 0.7% month-over-month decline.
First Published: 3:48 AM EST
U.S. stock futures were down on Monday morning as investors braced for earnings reports from major tech companies and the Federal Reserve’s upcoming meeting. Also, the emergence of DeepSeek, a Chinese AI startup, as a cost-effective AI competitor has impacted market sentiment. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were down 3.15%, 0.95%, and 1.79%, respectively, at 3:26 a.m. EST, January 27.
Investors should note that DeepSeek’s recently launched cost-effective AI model, developed using lower-end chips, has rattled the AI sector. This achievement has raised concerns about the potential impacts on U.S. tech giants like Nvidia (NVDA), OpenAI, and Google.
Last week, the U.S. stock market witnessed strong performance, with the S&P 500 and the Nasdaq Composite (NDAQ) hitting new all-time highs. Overall, the S&P 500 and the Nasdaq each gained 1.7%, while the Dow Jones added 2.2% during the week.
This week holds importance to investors as four out of the Magnificent Seven tech giants – Meta Platforms (META), Microsoft (MSFT), Tesla (TSLA), and Apple (AAPL) – are slated to release their quarterly earnings reports. These results will provide valuable insights into the health of the tech sector and the sustainability of the AI-driven market rally.
Along with these tech giants, companies such as Boeing (BA), General Motors (GM), ServiceNow (NOW), Intel (INTC), Mastercard (MA), Exxon Mobil (XOM), and Colgate (CL), among others, will report earnings this week. Today, AT&T (T), SoFi Technologies (SOFI), and Nucor (NUE) will release their quarterly numbers.
Strong earnings from these companies could solidify investor confidence and fuel continued market gains. At the same time, weak results could negatively impact the broader market sentiment.
Moving forward, investors will monitor the release of key economic data, including the Consumer Confidence report on Tuesday and the Gross Domestic Report for Q1 on Thursday. Also, the Personal Consumption Expenditures (PCE) price index, the central bank’s preferred measure of inflation, will be made public on Friday.
In addition, the Federal Reserve will hold its January meeting on Wednesday. While a rate hike is not expected, investors will closely watch for any clues about future monetary policy decisions.
Meanwhile, the U.S. 10-year treasury yield was down, floating near 4.548%. Simultaneously, WTI crude oil futures are trending lower, hovering near $74.34 per barrel as of the last check.
Elsewhere, European indices opened lower on Monday as investors looked ahead to a busy earnings week and the European Central Bank’s latest interest rate decision.
Asia-Pacific Markets Ended Mixed on Monday
Asia-Pacific indices were mixed today as investors assessed China’s weak Purchasing Managers’ Index (PMI) report and remained cautious about the potential impact of President Donald Trump’s tariff policies.
At the same time, Hong Kong’s Hang Seng Index was up 0.66%. Also, Japan’s Topix index was up 0.26%, while the Nikkei index was down 0.92%. Further, China’s Shanghai Composite and Shenzhen Component indices declined 0.06% and 1.33%, respectively.
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