Last week, the S&P 500 gained 1.74% on optimism around corporate earnings, pro-business policies, and a barrage of executive orders issued during President-elect Donald Trump’s first week in office.
This week was ignited by headlines stemming from viral social media posts over the weekend that DeepSeek, a China-based company, created an artificial intelligence open-source model that competes with rivals like ChatGPT for a fraction of the computing costs. White papers released by DeepSeek in December claim the costs of developing the open-source AI model were a mere $5.576m. Nvidia, the company known for making expensive high-end chips for AI, plunged 17% on concerns that the new technology could hurt demand for their chips. Earnings calls from Microsoft, Meta, Tesla, and Apple later this week could shed some light on DeepSeek’s AI model technology and uses.
The Federal Reserve is expected to keep interest rates unchanged on Wednesday. Jerome Powell will likely field questions on President Donald Trump’s campaign for lower rates. We get our first look at the fourth quarterGDP estimates on Thursday, and the Fed’s preferred inflation gauge, Personal Consumption Expenditures (PCE), reports Friday.
For a more detailed analysis of last week’s markets and economic trends, check out the latest issue of Market Week.
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David Bennett