January 28, 2025
DOW: 44858
S&P: 6053.5
Nasdaq: 21285.5
10YR T-Note: 4.57%
Bitcoin: 102075
VIX: 17.76
Gold:2754.5
Crude Oil:74.25
Prices Current as of 10:11 AM
Source: CNBC


Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.
In one of the most spectacular “Revenge of the Nerds” scenarios, the market’s technology former superstars collapsed while the lagging Dow underperformers made strong gains at the same time.
The latter gained 289 points to 44,713 after starting out lower by 398 on advances in items such as AAPL, AMGN, CRM, HD, JNJ, MCD, PG, UNH in addition to PEP (not in the Dow but an awful performer lately.
On the other hand, both the S&P and the Nasdaq sold off very sharply as a competitor from China threatens to upend the artificial intelligence frenzy that they have been rolling upward on.
As a result, the S&P got clobbered to the tune of 89 points to 6012, dragged down in large part by a 17% collapse from NVDA while the Nasdaq did even worse with a 612 point wipeout to 19,341. Other big tech stocks also took heavy losses, and they pulled it down by 3.1% for its worst loss in more than a month.
The damage was focused on AI-related stocks, while the rest of the market held up much better. Anyone holding an S&P 500 index fund, which are found in many 401(k) accounts, felt the pain because of how influential those tech giants have become on indexes.
The shock to financial markets came from China, where a company called DeepSeek unveiled a large language model that can compete with U.S. giants but at potentially a fraction of the cost. DeepSeek had already hit the top of the chart for free apps on Apple’s App Store by Monday morning, and analysts said such a feat would be particularly impressive given how the U.S. government has restricted Chinese access to top AI chips.
Skepticism, though, remains about how much DeepSeek’s announcement will ultimately shake the economy that is built around the AI industry, from the chip makers making semiconductors to the utilities hoping to electrify vast data centers gobbling up computing power.
It remains to be seen if DeepSeek found a way to work around these chip restrictions rules and what chips they ultimately used as there will be many skeptics around this issue given the information is coming from China, one top analyst mentioned.
DeepSeek’s disruption nevertheless rocked AI-related stocks worldwide.
In Amsterdam, Dutch chipmaking equipment company ASML slid 7%. In Tokyo, Japan’s Softbank Group Corp. lost 8.3% to pull closer to where it was before leaping on an announcement pushed by the White House that it was joining a partnership to invest up to $500 billion in AI infrastructure.
CEG lost more than a fifth of its value, down 21%. The company has said it would restart the shuttered Three Mile Island nuclear power plant to supply power for data centers for MSFT.
Other stocks in this category taking huge downside hits included AVGO, MRVL, TSM, VST which are mainly semiconductors.
All the worries sent investors toward bonds, which pushed the yield of the 10-year Treasury down to 4.52% from 4.62% late Friday.
This was a sharp downward turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring in would remake the global economy and deliver huge profits along the way. Such stellar performances also raised criticism that their stock prices had gone too far, too fast.
Before Monday’s drop, which was its worst since the 2020 COVID crash, NVDA’s stock had soared from less than $20 to more than $140 in less than two years, for example.
It was just on Friday that META CEO Mark Zuckerberg was saying he expects his company to invest up to $65 billion this year and grow its AI teams significantly, while talking up a data center in Louisiana that will be so large it could cover a significant part of Manhattan.
The Magnificent Seven A small group of such companies has become so dominant that they alone accounted for more than half the S&P total return last year, according to S&P Dow Jones Indices. Their immense sizes give them huge sway over the S&P and other indexes that give more weight to bigger companies. That is why many 401(k) holders felt the pain of NVDA’s drop, even if they didn’t know they owned any it so long as they owned a fund that tracks the S&P 500.
It is possible that the news out of China could be overstated and then we could see a reversal of the recent market moves, another observer mentioned, which could also mean that It is also possible that the news is true, but then that would present new investment opportunities.
The pressure is on companies now to keep delivering strong profits, particularly after the recent jump in Treasury yields which have been on the rise amid a solid U.S. economy and worries about possibly higher inflation coming from tariffs and other policies favored by the President.
So far, big U.S. companies have been reporting better results than analysts expected. T became the latest on Monday, and its stock rose but SOFT fell after its results. It had been moving sharply higher lately. A group that did well was the recently weak homebuilders which did well after the December new home sales report (see below for details)
This week could be one of the most significant ones due to the large number of companies reporting and also the Fed decision on Wednesday, plus the DeepSeek situation.
So here are the lineups: yesterday - T higher and SOFI lower; today - GM, LMT lower and RTX higher; tonight - SBUX; Wednesday - Dow components MSFT and IBM plus META, TSLA, ADP, ASML, TMUS, NFS ; Thursday - Dow components AAPL, CAT, V plus MA, DECK, UPS, LUV; Friday - Dow component CVX plus XOM, ABBV and Novartis.
Economic reports will see: yesterday - December new home sales rose to 698,000 which was a gain of 6.7% year over year; today - preliminary December durable goods orders down by 2.2% but higher when transportation is excluded, January Consumer Confidence; Wednesday - F.O.M.C. interest rate decision; Thursday - weekly jobless claims, first reading on 4Q G.D.P.; Friday - December personal income and spending.