Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were mixed ahead of Tuesday's open following Monday's stock market action.
Nvidia crashed nearly 17% Monday, breaking below the 50- and 200-day moving average lines, a key sell signal, and erasing $589 billion in value. The artificial intelligence giant bounced 3.6% in extended trading.
Over the weekend, it was reported that China's DeepSeek posed a threat to AI stocks as the start-up's apparent advances have raised questions over the computing power needed to develop AI systems, a key driver for stocks in that sector. DeepSeek said it spent just $5.6 million developing its new AI model.
While OpenAI and Google have developed proprietary AI models, DeepSeek has relied on super efficient "open source" technology. Reports have differed over what Nvidia chips DeepSeek has been using to build AI models. While some reports point to less powerful H800 chips, others claim DeepSeek's parent, High-Flyer, has been able to buy more advanced H100 Nvidia AI chips despite U.S. export restrictions.
Other AI leaders also plunged. Broadcom dived 17.4%, while Astera Labs crumbled almost 29%. Broadcom stock is clinging to its 50-day line, while Astera crashed through its own 50-day line, a sell signal.
DeepSeek Makes Nvidia Investors Face 8 'Secrets' Of Selling. No. 2 Is Key.
Dow Jones Futures Today: Oil Prices, Treasury Yields
On Monday, the Dow Jones Industrial Average climbed 0.7%, while the S&P 500 sold off 1.5% and the Nasdaq tumbled 3.1%.
Ahead of Tuesday's opening bell, Dow Jones futures fell 0.2% vs. fair value, while S&P 500 futures moved down 0.1%. Tech-heavy Nasdaq 100 futures were up 0.1% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
On Monday, the 10-year U.S. Treasury yield tumbled to 4.52%. And oil prices also fell sharply, as West Texas Intermediate futures settled around $73 a barrel.
Nvidia Topples Apple. Now Microsoft Looks To Do The Same.
Apple, Meta Rally; Tesla At Key Level
Four of the Magnificent Seven stocks ended lower Monday, as the Roundhill Magnificent Seven ETF dropped 3.1%. It is threatening to give up support at the 50-day line.
Apple rallied 3.2%, rebounding from recent losses. But the tech titan remains below its 50-day line.
Meta Platforms moved up 1.9% Monday, further above a 638.49 flat-base entry. The 5% buy zone runs up to 670.41.
Finally, Tesla skidded another 2.3%, still trying to find support at the 50-day line. A decisive rebound would put the Elon Musk-led company in a new buying area. Meanwhile, shares are almost 19% off their 52-week high.
Despite Struggles, Palantir Secures Spot Among 25 'Perfect' Stocks
What To Do Now
Now is an important time to read IBD's The Big Picture column. After Monday's session, be sure to check out today's updated exposure level.
On Monday's "IBD Live" show, the team discussed the current trading conditions of the stock market action.
Amid the weakness, investors should be utilizing diligent risk management, one of the four pillars of The IBD Methodology. It's important to monitor positions that are acting out of character and sell any stocks that trigger sell rules.
An essential resource for daily breakouts is IBD MarketSurge's "Breaking Out Today" list. It shows MarketSurge Growth 250 stocks that are breaking out past buy points. Meanwhile, the MarketSurge "Near Pivot" list shows more stocks nearing buy points in bases.
To find more stock ideas, check IBD Stock Lists like IBD 50, Big Cap 20 and Stocks Near A Buy Zone. These features identify bullish patterns and buy points and are available to check every day.
Be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
