The latest
U.S. stocks closed lower for the week after semiconductor shares tumbled following the launch of a Chinese artificial intelligence model that its developer said could compete with leading offerings from OpenAI and Anthropic, renewing fears of another “DeepSeek moment,” according to Bloomberg.
Details
• Market losses: The Nasdaq 100 fell 1.5%, while the S&P 500 dropped 1%, ending a two-week winning streak.
• Bear market: The Philadelphia Semiconductor Index lost 1.6%, extending its decline to more than 20% from its recent peak, meeting the definition of a bear market.
• AI concerns: Moonshot’s Kimi K3 model renewed questions about competitive pressures and whether massive AI investment will generate the expected returns.
• Corporate movers: Netflix fell 7.3% after forecasting a second straight quarter of slower revenue growth, while Intuitive Surgical slid 14% on softer U.S. sales growth for its da Vinci surgical robots.
• Investor focus: Analysts said chip stocks could recover if major AI companies reaffirm their capital spending plans during the earnings season.
Between the lines
The market is shifting from enthusiasm over AI to a closer examination of whether heavy investment can translate into sustainable revenue and profits, making technology shares more sensitive to earnings guidance.
What to watch
Investors will closely watch earnings from major technology companies for updates on AI spending plans, demand trends, and whether management teams maintain their long-term investment outlook.
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