Overnight U.S. Stocks | Tech Stocks Plummet, Meta Platforms and Apple Escape Disaster

According to Zhitong Finance, on Monday, U.S. tech stocks plummeted, and a new model from Chinese artificial intelligence startup DeepSeek caused a stir in the market, raising concerns among investors that the high valuations of U.S. tech stocks might be facing a bubble burst. The stocks of two tech giants remained unscathed during Monday's sell-off. Meta Platforms (META.US) and Apple (AAPL.US) saw their stock prices rise, unaffected by the sell-off triggered by DeepSeek's artificial intelligence (AI) model, while tech stocks generally declined. Options traders also rushed into the market, buying options betting that Meta Platforms and Apple stock prices would continue to rise. What is supporting this boom? Some analysts suggest that these companies may benefit from lower-cost large language models (LLM), which are the technology behind AI chatbots like OpenAI's ChatGPT and DeepSeek. Some of the most actively traded Apple options contracts are call options linked to the stock rising to $240 and $265. For Meta, traders are betting that the stock will rise to $1,250 and $1,300.

【U.S. Stocks】 As of the close, the Dow Jones Industrial Average rose 289.33 points, an increase of 0.65%, to 44,713.58 points; the Nasdaq fell 612.47 points, a decrease of 3.07%, to 19,341.83 points; the S&P 500 index fell 88.96 points, a decrease of 1.46%, to 6,012.28 points. Nvidia (NVDA.US) closed down nearly 17%, with a market value evaporating by about $600 billion, marking the largest loss in U.S. stock history. The Philadelphia Semiconductor Index fell 9%, Broadcom (AVGO.US) dropped 17.4%, TSMC (TSM.US) fell 13%, and Microsoft (MSFT.US) declined 2%. The Nasdaq Golden Dragon China Index closed up 0.1%.

【European Stocks】 The German DAX30 index fell 107.16 points, a decrease of 0.50%, to 21,278.46 points; the UK FTSE 100 index rose 0.55 points, an increase of 0.01%, to 8,502.90 points; the French CAC40 index fell 21.04 points, a decrease of 0.27%, to 7,906.58 points; the Euro Stoxx 50 index fell 32.52 points, a decrease of 0.62%, to 5,186.85 points; the Spanish IBEX35 index rose 16.76 points, an increase of 0.14%, to 11,999.36 points; the Italian FTSE MIB index rose 6.28 points, an increase of 0.02%, to 36,207.00 points.

【Asia-Pacific Stock Markets】 Most Asian markets were closed for the Spring Festival holiday, with the Nikkei 225 index down 0.92%.

【Cryptocurrency】 Bitcoin briefly fell below $100,000, and as of the time of writing, Bitcoin was down over 1%, trading at $101,575.7.

【Gold】 Spot gold fell 1.02%, trading at $2,742.12 per ounce, with an intraday trading range of $2,772.61 to $2,730.58, mostly in a downward trend; COMEX gold futures fell 1.20%, trading at $2,745.50 per ounce, with an intraday trading range of $2,777.80 to $2,732.00, remaining in a downward trend throughout the day [Crude Oil] The price of West Texas Intermediate (WTI) crude oil futures for March delivery on the New York Mercantile Exchange fell by $1.49, a decrease of 2%, closing at $73.17 per barrel. The price of Brent crude oil futures for March delivery on the Intercontinental Exchange fell by $1.42, a decrease of 1.81%, closing at $77.08 per barrel.

[Macroeconomic News]

The Federal Reserve's overnight reverse repurchase usage falls below $100 billion again, hitting the lowest level since 2021. The balance of the Federal Reserve's overnight reverse repurchase (RRP) agreement tool has fallen below $100 billion again, marking the lowest level in nearly four years, as high levels in the private market continue to siphon off central bank funds. On Monday, about 26 counterparties deposited $92.9 billion in RRP, the lowest since April 2021; the previous trading day was $104.9 billion.

The yield on the U.S. 5-year Treasury bond auctioned at 4.33%, lower than the pre-auction trading yield. The U.S. Treasury issued $70 billion in 5-year Treasury bonds, with a winning yield of 4.330%, slightly lower than the pre-auction trading yield of 4.336% at the voting deadline of 1 PM New York time, reflecting strong subscription demand. After the auction, mid-term bonds outperformed, with the yield curve for 5-year and 30-year bonds steepening, and the yield spread widening to about 45 basis points. Primary dealers received 11.1%, direct bidders received 26.1%, one of the highest levels on record. The allocation for indirect bidders fell to 62.8%. The bid-to-cover ratio was 2.40, consistent with the average of the previous six auctions.

The White House calls for a plan to bring federal employees back to the office, facing resistance in actual implementation. Another guideline released by the U.S. Office of Personnel Management on Monday also initiated a plan to reshape the federal workforce under Trump, granting the president the power to hire and fire some previously protected employees. The mandatory return to the office applies to federal employees "unless due to disability, qualifying medical conditions, or other compelling reasons certified by the agency head." Spouses of military personnel in civilian jobs are also exempt from this restriction. A memo implementing Trump's order acknowledges that there are many practical obstacles to bringing employees back to the office. Many of these are bound by collective bargaining agreements, including an agreement reached by Social Security Administration employees in the final days of the Biden administration that allows for more flexible work arrangements.

[Individual Stock News]

Nvidia plummets nearly 17%, leading to a significant loss of wealth for tech giants led by Jensen Huang. Nvidia (NVDA.US) shares fell nearly 17%, with a record market value loss of $589 billion. According to Forbes, CEO and largest individual shareholder Jensen Huang's net worth shrank by $2.08 billion at the close, dropping from $124.4 billion to $103.7 billion, falling from 10th to 17th place on Forbes' real-time billionaire list. Oracle (ORCL.US) fell 14%, with Chairman Larry Ellison's net worth shrinking by $27.6 billion, dropping from third to fifth on the global billionaire list. The Bloomberg Billionaires Index shows that the world's 500 richest individuals collectively lost $108 billion on Monday, with tech industry giants seeing a total wealth evaporation of $94 billion, accounting for about 85% of the total decline in the index Apple pushes software update to enable artificial intelligence by default. Apple (AAPL.US) released a software update for iPhone, iPad, and Mac on Monday, enabling Apple Intelligence by default on devices supporting Apple's artificial intelligence. These updates include iOS 18.3, iPadOS 18.3, and macOS Sequoia 15.3, while disabling the AI summary feature in the news app due to its distortion of news push notifications and generation of false summaries. Apple Intelligence is still in the official testing phase and is only available in a few English-speaking countries. The default activation of artificial intelligence marks a new step for Apple in the full rollout of Apple Intelligence.

Tesla and BMW file lawsuit against EU court over electric vehicle anti-subsidy investigation. The European Commission confirmed on the 27th that Tesla (TSLA.US) and BMW have filed a lawsuit against the EU court, opposing the tariffs imposed on electric vehicles imported from China. European Commission spokesperson Olof Gill stated that the EU is aware of these cases and will defend itself in court. Last October, despite widespread opposition, the European Commission insisted on imposing a five-year anti-subsidy tax on electric vehicles imported from China. Since then, many companies have questioned the European Commission's determination of subsidies, calculation methods, and the damage caused to the EU single market during the anti-subsidy investigation