Nasdaq Falls 3 Percent as China’s DeepSeek AI Ignites Market Rout

‘For now, the initial reaction is to sell first and ask questions later,’ Jay Woods, chief global strategist for Freedom Capital Markets, said.

A trader works on the floor of the New York Stock Exchange ahead of the closing bell on Aug. 5, 2024. Charly Triballeau/AFP via Getty Images

DeepSeek, a Chinese artificial intelligence (AI) app that has soared to the top of the U.S. App Store and overtaken OpenAI’s ChatGPT, flooded the financial markets with red ink at the Jan. 27 opening bell.

The tech-heavy Nasdaq Composite Index declined by 3 percent to kick off the trading week. The S&P 500 declined by nearly 2 percent, while the blue-chip Dow Jones Industrial Average shed about 100 points.