Nvidia shares failed to recover as US stocks traded lower, a day after the US chipmaker was hit by the emergence of a cheap Chinese artificial intelligence venture.
About 20 minutes into trading, the Dow Jones industrial average fell 0.2 percent to 44,640.47 points and the broader S&P 500 index lost 0.3 percent to 5,996.35 points.
The Nasdaq Composite Index initially opened slightly higher, but lost 0.2% to 19,313.44 points in early trading.
The initial rebound is "very typical when you have significant declines, especially when they're triggered by news that's still unraveling," said Art Hogan of B. Riley Wealth Management.
A day earlier, shares of Nvidia, whose semiconductors power the artificial intelligence industry, plunged nearly 17 percent on Wall Street, wiping nearly $600 billion off its market value.
Chinese company DeepSeek, whose chatbot has become the top-rated free app in Apple's U.S. App Store, said it spent just $5.6 million developing its model - a fraction of the billions that U.S. tech giants have poured into their artificial intelligence systems.
Hogan noted that "we will likely learn more about DeepSeek, its capabilities and the credibility of the claims," as well as what it means for the long-term AI investment environment.
But despite the Jan. 27 drop in tech stocks, and especially among semiconductors, there are plenty of positives beneath the surface, he added.
The Federal Reserve also began a two-day policy meeting, and investors were awaiting a number of corporate reports, including those from aviation giant Boeing and automaker General Motors. Both companies reported quarterly losses. | BGNES
