Wall Street’s leading stocks are experiencing a downturn as a new competitor from China threatens to disrupt the current boom in artificial intelligence that many have been enjoying.

On Monday, the S&P 500 index recorded a drop of 1.5%. Major technology stocks faced significant declines, with Nvidia’s shares plummeting close to 17%. This dip dragged the Nasdaq composite down by 3.1%. Additionally, utility companies that aim to provide energy solutions for the power-intensive AI data centers also saw their stocks decline. In contrast, stocks in sectors not directly associated with AI appeared to perform better, leading to a 0.7% increase in the Dow Jones Industrial Average.

The recent news stems from a Chinese enterprise named DeepSeek, which claims to have developed a large language model that could rival those of leading American firms, potentially at a significantly lower cost.
The specifics of the market performance on Monday showed the S&P 500 falling by 88.96 points (1.5%) to close at 6,012.28. Meanwhile, the Dow Jones Industrial Average saw an increase of 289.33 points (0.7%), finishing at 44,713.58. The Nasdaq composite experienced a significant drop of 612.47 points (3.1%), closing at 19,341.83. Additionally, the Russell 2000 index, which represents smaller companies, decreased by 23.71 points (1%) to reach 2,284.02.

When looking at year-to-date figures, the S&P 500 has seen an upward movement of 130.65 points, amounting to a 2.2% increase. The Dow has surged by 2,169.36 points, or 5.1%. The Nasdaq’s performance has been more modest, gaining 31.04 points, constituting a 0.2% rise. The Russell 2000 has also shown a positive trend, climbing by 53.87 points or 2.4%.