The AI world got a wake-up call on Monday when Chinese startup DeepSeek sent tech stocks into a spiral, triggering the biggest one-day drop in Nvidia's history, wiping out $593 billion in market value. The news hit hard because DeepSeek claims it built its AI model for just $5.5 million using cheaper chips and less data, raising real questions about the sky-high valuations of U.S. tech companies that have been pushing for AI-related industries. The selloff went well beyond just chipmakers, hitting everything connected to AI—from data centre operators to power companies that were counting on huge energy demand from AI computing. The timing couldn't be more dramatic, with tech heavyweights Microsoft, Meta, and Tesla all set to report earnings this week, leaving investors wondering if this Chinese AI challenger might force U.S. companies to rethink their expensive AI plans.

EQUITY

Wall Street opened the week with a brutal selloff, with the tech-heavy Nasdaq falling 3.1% and pulling the S&P 500 down 1.5%, though the Dow managed to climb 0.7% as investors moved money into safer bets like consumer staples. Interestingly, not all tech giants felt the pain equally: Apple shares actually rose 3.2%, and Amazon managed a small gain, showing that investors are getting pickier about which AI stories they believe in.

GOLD

Gold prices remain volatile as markets await the Federal Reserve’s rate decision and Chair Powell’s commentary, with investors looking for hawkish signals against President Trump’s push for rate cuts and inflationary tariff policies. Its role as an inflation hedge and heightened economic volatility under Trump’s policies could push the price to $3000 or higher.

OIL

Oil holds near 2-week lows as Trump’s tariff threats and weak China PMI data fuel demand fears. Warmer weather had cut heating needs, while US sanctions on Russian oil disrupted supplies in Shandong with an estimated 1 million bpd loss. Fed rate decision and OPEC tensions add to volatility with markets eyeing the Feb 1 tariff deadline for clearer direction.

CURRENCY

The dollar rebound from a month low on President Trump's renewed threats to impose tariffs on imported computer chips, pharmaceuticals, and steel, heightening demand. While the Fed is expected to maintain current rates, its inflation outlook will be monitored for clues on future cuts, with the European Central Bank's meeting also in view. The dollar index rose to 107.89, gaining sharply against the euro and yen, as markets grappled with volatile trade headlines and reversed Monday's risk-off moves.