U.S. stocks rebound on big-cap stocks, which fell sharply in the wake of deep stock market on 01/29

Following a sharp drop the previous day, the U.S. stock market started fluctuating with interpretations of the aftermath of the dip. In particular, economic instability caused by slowing economic indicators is also negative. However, the index turned strong as buying was focused on large-cap stocks and software stocks, with Nvidia (+8.93 percent), which fell sharply the previous day, expanding its gains after a turnaround. Afterwards, the Nasdaq expanded its gains to close with the Nasdaq (Dow +0.31%; Nasdaq +2.03%; S&P 500 +0.92 percent; Russell 2000 +0.21 percent; Philadelphia Semiconductor Index +1.11 percent)

*Variants: Evolving the DeepSeek Situation, Job Market Concerns

It shows that the evolution of the AI industry, that is, the tendency to shift from infrastructure to applications, is being emphasized. This is because if DeepSeek’s open source is used, many companies are expected to create AI applications at low prices, further accelerating the use of AI. The AI industry is currently expanding its application to numerous industries such as software, automobiles, healthcare, and education, and this DeepSeek is expected to further increase the related trend. In other words, DeepSeek can be seen as an important turning point in the spread of the AI industry.

While most of AI hardware spending has been built on infrastructure such as semiconductors, networks and computing, the deep-seated crisis has brought attention to whether these companies’ capital spending is reasonable. Volatility could increase for the semiconductor and data center industries, which are highly valued, depending on whether companies pause to re-evaluate capital spending or accelerate further to development. That’s why the size, direction and content of capital spending become important in this week’s announcement of big tech earnings.

It should be noted that competition and cost reduction for AI models are positive for companies that use them, leaving behind such infrastructure investment. This is because barriers to entry will be lowered due to falling prices, which will expand AI application and expand related spending to all industries. As a result, the transition to strengthening reasoning function is positive for the software industry using it, but there is a high possibility that the controversy over monetization related to infrastructure investment will expand further.

Meanwhile, the U.S. consumer confidence index slowed from 109.5 to 104.1, with abundant jobs falling from 37.1% to 33.0% and job hunting rising from 14.9% to 16.8%. As a result, the labor gap fell sharply from 22.2% to 16.2%, increasing anxiety over the job market. The dollar and interest rates also rose ahead of the FOMC. The stock market was strong, led by some large technology stocks and software, which fell sharply the previous day due to anxiety over the U.S. economy, while most stocks were undergoing a downward differentiation.

*Featured Stock: Nvidia Jumps 8.93% Vs. Micron Down 3.14%

Nvidia (+8.93%) fell nearly 2% in early trading, but extended its gains after rising due to the influx of backlash buying. It is estimated that this is due to increased expectations ahead of the earnings announcement of large technology stocks. TSMC (+5.25%) is also strong. AMD (-0.73%) fell after Melius Research downgraded its investment opinion to hold from buy, saying Nvidia is directly targeting AMD in both AI and PC chips. Broadcom (+2.59%) plunged with its own technology highlighting that the part that makes alternative chips with its own technology could be hit hard by DPSIC, but today it rebounded with the influx of reversals. However, most of them are sluggish, including Micron (-3.14%), Intel (-2.41%), Ram Research (-1.48%) and ASML (-0.99%). The Philadelphia Semiconductor Index rose 1.11%

Salesforce (+3.70%) continued to rise as it was highlighted that it could benefit from DPSC following the previous day. ServiceNow (+2.61%), Autodesk (+3.63%), Oracle (+3.61%) and Palantir (+6.35%) also rose. Cloud Strike (+9.35%), Cloudflare (+10.68%), Palo Alto (+1.92%), and Gescaler (+7.03%) rose as it became clear that cyber security companies could benefit from the situation.

Apple (+3.65 percent) rose after IDC announced last quarter that the iPhone was the best-selling smartphone in China (17.4 percent in the fourth quarter, followed by Huawei (17.2 percent). Apple’s recent decline was attributed to sluggish iPhone sales, which can be reversed. Meta Platforms (+2.19 percent) rose after Citi mentioned that Meta’s AI tools could benefit from Dipshik. MS (+2.91%) rose on news that Trump is negotiating to acquire TikTok. If acquired, it will have positive impact on sales growth and data collection. In the meantime, Meta’s internal volatility after the earnings announcement in the options market stands at 7.5 percent and Microsoft’s 4.6 percent, drawing attention to the possibility of expanding volatility after the earnings announcement. Amazon’s (+1.16 percent) is strong on the news that shipments of AI chips for AWS will increase by 70 percent year-on-year in 2025. Alphabet’s (+1.70 percent) is also strong.

Tesla’s (+0.24 percent) declined, but succeeded in shifting upward after the announcement of the passage of the transportation minister’s nomination. Secretary Sean Duffy mentioned that he would make a federal rule on autonomous driving, which is believed to be the result of highlighting the possibility of rapid growth of related industries. The fact that Tesla’s internal volatility is 8.9 percent, and attention is being paid to the volatility after the earnings announcement. Uber (-1.02%) and Lyft (+0.72 percent) are in a mixed mood while increasing volatility during the day. GM (-8.89 percent) fell sharply despite its good performance and forecast. The fact that Trump’s policy such as rising parts prices was not reflected when imposing tariffs on Canada and Mexico was highlighted. Ford (-2.89 percent) also fell.

Arista Networks (+6.22%) rose last week as Meta’s $60-$65-billion capital spending plan was highlighted. Meta is Arista Networks’ biggest network equipment customer. Meanwhile, Dell (-2.46%), SuperMicrocomputer (-3.06%), Western Digital (-2.38%), and Seagate (-3.10%) cut capital spending from DPSK