Stocks rose higher Tuesday, as market participants looked to recover from a broad market sell-off spurred by the release of Chinese start-up DeepSeek's powerful artificial intelligence. The S&P 500 Index added about 0.9%, while the Nasdaq Composite advanced 2% and the Dow Jones Industrial Average built on its growth from the previous session, climbing 130 points.
Here's how the market settled on Tuesday:
S&P 500 Index (SPY ): +0.92% or +55.42 points to 6,067.70
Dow Jones Industrial Average (DIA ): +0.31% or +136.77 points to 44,850.35
Nasdaq Composite Index (QQQ ): +2.03% or +391.75 points to 19,733.59
Semiconductor darling Nvidia (NVDA ) shares modestly rebounded Tuesday after wiping out almost $600 billion in market value on the heels of DeepSeek's social media attention over the weekend -- now representing the largest one-day loss for a U.S. company ever. DeepSeek AI, which reportedly uses a chip set-up that costs much less than those from other leading generative models, also topped OpenAI to become the most-downloaded free app in the Apple (AAPL ) App Store in the United States.
"The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser focused on competing," President Donald Trump told reporters Monday evening. "Instead of spending billions and billions, you'll spend less, and you'll come up with, hopefully, the same solution under the Trump administration. We're going to unleash our tech companies, and we're going to dominate the future like never before."
In the News:
The U.S. Food and Drug Administration (FDA) expanded the use of Novo Nordisk's (NVO ) Ozempic on Tuesday to treat chronic kidney disease in patients with Type 2 diabetes. The new approval will allow the popular injection to be used to reduce the risk of worsening kidney disease, kidney failure, and death from cardiovascular disease in patients with both chronic kidney disease and diabetes.
Elon Musk's social media platform X announced Tuesday the launch of a digital wallet and peer-to-peer payments services facilitated by Visa (V ), with operates the largest credit card network in the United States. Named X Money Account, X users will be able to move funds between traditional bank accounts and their digital wallet, CEO Linda Yaccarino said in a post on the platform.
Microsoft-backed (MSFT ) OpenAI on Tuesday announced the launch of ChatGPT Gov, built specifically for U.S. government use. The new platform allows government agencies to feed "non-public, sensitive information," into OpenAI's large language models while remaining within their secure hosting environments, OpenAI Chief Product Officer Kevin Weil told reports during a briefing late Monday.
Since last year, OpenAI said more than 90,000 government employees have generated more than 18 million prompts with ChatGPT to conduct tasks like translating and summarizing documents, writing policy memos, generating code, and building applications.
On the Earnings Front:
General Motors (GM ) shares fell Tuesday, putting the automaker on pace for its worst day since 2020, despite the company posting better-than-expected fourth-quarter results and issued strong forward guidance, as analysts focused on the impacts of potential Trump administration tariffs on vehicle production. The automaker expects adjusted earnings before interest and taxes od $13.7 billion to $15.7 billion, or $11 to $12 per share for its fiscal 2025, with its top range exceeding analyst forecasts.
"In our view, the guidance for 2025 leaves no room for errors, and also does not include impact from regulatory changes in the U.S., especially on tariffs and BEV support," analysts at Bernstein wrote in a note following GM's earnings release.
Boeing (BA ) shares rose Tuesday, even as the aerospace manufacturer posted its biggest annual loss in four years at $11.8 billion, as investors were encouraged by its progress on increasing production after its several week long machinist strike.
"There are some areas where we can streamline the organization or we may be better off focusing our energy elsewhere and we'll be actioning those over the coming months and year," CEO Kelly Ortberg told analysts during the company's earnings call on Tuesday. "I think if I give you any guidance, think of it as more pruning the portfolio, not cutting down the tree."
JetBlue Airways (JBLU ) shares dropped on Tuesday after the New York-based airline issued disappointing forward guidance as it works to reduce costs by ending unprofitable routes, deferring new aircraft, and encouraging passengers to select higher-priced seats. JetBlue expects its unit costs, excluding fuel, to rise as much as 7% in 2025 year-over-year. The carrier also expects its 2025 revenue to increase between 3% and 6% on flat capacity.
For Wednesday:
Investors will turn their attention to earnings reports from companies including Starbucks (SBUX ), ASML Holding (ASML ) and T-Mobile (TMUS ) on Wednesday, as well as the Federal Reserve's first decision on interest rates in 2025 due out in the afternoon.
