Tech Stocks Appear to Stabilize on Day After Rout

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The sell-off that hit the biggest technology companies in the United States at the start of the week appeared to abate on Tuesday, with some of the hardest-hit shares finding their feet.

Shares in tech companies, especially those propelled by the profit-making potential of artificial intelligence, were shaken on Monday after the Chinese A.I. company DeepSeek said it could match the capabilities of the most advanced chatbots using far fewer expensive computer chips.

Markets in the United States stumbled as trading opened on Tuesday before beginning to recover some of Monday’s losses. The S&P 500 rose 0.5 percent, while the tech-heavy Nasdaq Composite index rallied roughly 1 percent.

Alphabet and Microsoft both rose by more than 1 percent, while Oracle moved about 3 percent higher. Shares of the Silicon Valley chip company Nvidia, which lost roughly $600 billion of its market value on Monday, rose nearly 3 percent, recouping roughly $60 billion of its previous valuation.

Nvidia is the standard-bearer of a group of tech giants known as the Magnificent Seven. Those stocks have led the entire market higher in recent years, with the S&P 500 posting back-to-back annual gains of more than 20 percent for the first time since the 1990s. Those lofty returns have generated views that the market has become overly dependent on the performance of just a few high-flying companies.

“While vulnerabilities were expected this year, developments like DeepSeek highlight the need for diversification beyond the Mag 7,” said Seema Shah, chief global strategist at Principal Asset Management. She said that the idea that U.S. stocks would continue an unabated rise “is now facing uncertainty,” noting that investors were contending with stubborn inflation and the prospect of hefty tariffs that could weigh on spending and economic growth.

Meta and Microsoft will report quarterly earnings on Wednesday, kicking off the latest round of financial results from big technology companies. Analysts are expected to press corporate leaders on their ability to maintain lofty growth expectations in light of new competition. Apple also reports earnings this week, while Nvidia is not scheduled to deliver its financial results until the end of February.

Overnight, the sell-off in U.S. markets rippled across the globe. Japan’s tech-heavy Nikkei 225 fell 1.4 percent on Tuesday with Softbank, the Japanese investment firm with major A.I. holdings, dropping about 5 percent. Many financial markets in Asia, including those in mainland China and Taiwan, are closed this week for Lunar New Year.

Markets in Europe bounced, with the pan-European Stoxx 600 index gaining 0.5 percent. ASML, a Dutch company that makes the machines that build the most cutting-edge semiconductors, traded fell a further 0.7 percent, after a steep fall on Monday.