The introduction of DeepSeek, a cost-effective AI solution, is expected to reduce operational expenses for major tech companies, potentially boosting profitability and stock valuations. However, the broader market is currently grappling with geopolitical uncertainties, such as potential US restrictions on Chinese tech, including DeepSeek. These concerns are weighing on investor sentiment, overshadowing the immediate positive impact of DeepSeek's emergence. The S&P 500 Index has seen a decline as investors balance the potential benefits of AI adoption with the risks posed by geopolitical tensions.
The SPDR Portfolio S&P 500 Growth ETF (SPYG) experienced a notable decline, dropping 3.88% to $88.45 at 14:20 on Monday, January 27.