A sharp decline in the technology sector, led by Nvidia's double-digit loss, marked the biggest drop in the S&P 500 tech sector since September 2020. While other sectors showed gains, the tech selloff overshadowed them, impacting the broader market and the net worth of tech industry titans. DeepSeek, a company claiming to have developed a competitive AI model at a fraction of the cost, emerged as a bright spot in the tech landscape.
A major tech selloff shook Wall Street on Monday, with Nvidia leading the charge lower in a decline that marked the biggest drop in the S&P 500 technology sector since September 2020. The decline in Nvidia 's market value, which exceeded the combined market value of home improvement giants Home Depot and Lowe's, sent ripples across the market, obscuring some solid gains in other sectors.
Despite the market downturn, a company called DeepSeek grabbed headlines by claiming to have developed a large language model capable of competing with U.S. AI giants, but at a fraction of the cost. DeepSeek's free app shot to the top of Apple's App Store charts, an impressive feat considering the U.S. government's restrictions on Chinese access to top AI chips.The S&P 500 technology sector plummeted, with Nvidia being one of eight stocks in the sector to post double-digit losses. While Apple shares rose more than 3%, cushioning the blow to the broader S&P 500, the tech-heavy Nasdaq Composite also saw significant drops. High-flying stocks like Nvidia, Broadcom, and Google's parent company Alphabet all experienced declines, highlighting the volatility of the tech sector.The selloff didn't spare the wealthiest individuals associated with these tech giants. Larry Ellison, Oracle's CEO, saw his net worth drop by billions, despite a recent surge fueled by President Donald Trump's announcement of a new partnership between OpenAI, Oracle, and SoftBank. Meanwhile, Nvidia's CEO, Jensen Huang, witnessed a significant reduction in his net worth, losing over $20 billion in the market downturn. Even Vistra Corp., a non-tech company focused on power production, felt the impact, with its shares dropping sharply after a previous surge driven by expectations of increased energy demand for AI infrastructure. The fact that the S&P 500 index dropped despite over three-fifths of its component stocks rising demonstrates the powerful influence of tech stocks on the overall market. The Dow Jones Industrial Average, which has less exposure to technology compared to the S&P 500 and Nasdaq, closed with a modest gain, highlighting the sector-specific nature of the selloff
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