Nasdaq dives on Chinese AI threat – Earnings in focus [Video]

Last week wrapped up with a striking contrast: bullish momentum through most of the week gave way to a bearish close on Friday. A set of stronger-than-expected PMI data prompted investors to recalibrate their Federal Reserve (Fed) outlook, weighing stronger economic growth and the likelihood of a more hawkish Fed response.

A such, the Stoxx 600 retreated after hitting a fresh record. The S&P500 and Nasdaq traded lower as well, and futures, especially Nasdaq futures, are looking pretty bad this morning with a more than 2% slide at the time of writing hammered by the news that the Chinese startup DeepSeek could run its latest AI model on less advanced chips... and could disrupt the US tech’s global dominance.

But keep calm and breath. It’s probably too early to bet that DeepSeek will challenge the global AI leaders. This week’s Big Tech earnings will certainly give a stronger conviction to those looking for a fresh direction.

This week, four of the Magnificent 7 stocks – Microsoft, Meta, Tesla and Apple – and ASML are due to announce their Q4 earnings, along with Intel, Visa and Mastercard, and the oil giants.

It will be a big week for central bank decisions, too. The Fed is expected to keep rates unchanged, while the European Central Bank (ECB) and the Bank of Canada (BoC) are expected to cut theirs by 25bp.