Dow Jones Futures Drop as DeepSeek Disrupts Nvidia; Key Earnings From Meta, Tesla, Microsoft Ahead
Dow Jones futures, S&P 500 futures, and Nasdaq futures all declined Sunday night amid growing concerns about AI advancements from China’s Deep Seek. The news sent ripples through the market, with Nvidia, Broadcom, and other AI-related stocks showing signs of weakness overnight.
This week brings high-stakes earnings reports from Tesla, Meta, Microsoft, Apple, and ServiceNow, alongside a pivotal Federal Reserve meeting.
Dow Futures Overview
- Dow Jones futures: Fell 0.4%
- S&P 500 futures: Dropped 0.9%
- Nasdaq 100 futures: Plunged 1.8%
Meanwhile, the 10-year Treasury yield edged down slightly to 4.59%. Crude oil prices dipped, and Bitcoin slid to $101,000. President Donald Trump also announced potential 25% tariffs on Colombian goods after a diplomatic standoff, though Colombia seemed to backtrack.
China’s manufacturing index unexpectedly dropped to 49.1, signaling contraction, while the non-manufacturing index also fell to 50.2, missing expectations.
Note: Overnight action in Dow Jones futures doesn’t always translate into performance during the next trading session.
Stock Market Rally Update
The stock market rally maintained strength last week despite tech-led losses on Friday. The Dow Jones Industrial Average climbed 2.15%, the S&P 500 gained 1.7%, and the Nasdaq composite rose 1.65%, although it encountered resistance just below all-time highs. The small-cap Russell 2000 advanced 1.4%, but also faced resistance.
Tech, financial, industrial, and energy stocks delivered solid performances, with several sectors showing significant movement.
AI Stocks Under Pressure
AI stocks enjoyed momentum last week due to President Trump’s “Stargate Project,” which involves Oracle, SoftBank, and OpenAI. However, concerns over Dow Jones Deep Seek’s new AI model rattled the market on Friday. DeepSeek claims to have developed a powerful AI system for just $5.6 million using lower-cost chips, potentially threatening demand for high-priced hardware like Nvidia’s AI chips.
As a result, Nvidia and Broadcom stocks were indicated 5% lower Sunday night. Meta, despite its strong capital expenditure plans, was also down modestly.
Treasury Yields and Commodities
The 10-year Treasury yield ended last week at 4.62%, recovering slightly after hitting an intraday low of 4.55%. The Federal Reserve is expected to maintain its current policy at this week’s meeting Dow Jones , with future hikes unlikely before May or June.
Crude oil prices dropped 3.5% last week Dow Jones , settling at $74.66 per barrel.
Key Earnings Reports Ahead
Tesla, Meta, Microsoft, and ServiceNow will report earnings Wednesday evening, shortly after the Fed’s announcement. Apple’s earnings are expected Thursday night. The results will heavily influence broader markets and key stocks like Nvidia, Broadcom, Alphabet, Amazon, and Arista Networks.
Meta’s stock broke out last week, fueled by its strong capital spending plans for 2025. ServiceNow and Microsoft stocks are near buy points, while Tesla is forming a new base, despite a 4.7% weekly decline.
Tesla recently launched a refreshed Model Y, but investors are watching closely for updates on self-driving technology and robotics.
ETF Performance
Growth ETFs saw significant gains last week:
- Innovator IBD 50 ETF (FFTY): Up 3.7%
- iShares Expanded Tech-Software Sector ETF (IGV): Up 3.5%
- VanEck Vectors Semiconductor ETF (SMH): Rose 1.3%, despite Friday’s 2% dip
The ARK Innovation ETF (ARKK) surged 4.6%, while ARK Genomics ETF (ARKG) soared 12.3%, driven by Tesla’s dominance across Ark Invest’s portfolios.
Investor Strategy: What To Do Now
The market rally shows resilience, with major indexes clearing key levels and many stocks breaking out or offering buy signals. However, the Nasdaq’s resistance at all-time highs and the Russell 2000’s struggles at the 50-day line suggest cautious optimism.
Investors should consider adding exposure but remain selective. Those fully invested may want to cut lagging stocks to create room for promising opportunities.
With a packed schedule of earnings, the Fed meeting, and potential tariff announcements, uncertainty looms. Stay engaged, monitor leading stocks, and have a game plan ready.
Stocks to Watch
Nvidia, Meta, and ServiceNow are on IBD’s Leaderboard, while Tesla is on the watchlist. Amazon appears in SwingTrader, and Microsoft is part of IBD’s Long-Term Leaders. These stocks, along with Arista and Broadcom, remain top contenders in their respective sectors.
Stay tuned to IBD Live for expert analysis and updates throughout the week. For more insights, follow Ed Carson on Threads (@edcarson1971) or Twitter (@IBD_ECarson).
