Day Traders Diary

1/27/25

The major averages closed mixed to start the week with a sharp sell off in the tech space on news out of Chinese regarding a startup DeepSeek, which has possibly made a competitive AI model for a fraction of the billions Silicon Valley is spending. The Dow Jones Industrial Average rose 289 points led by Apple, the healthcare space and consumer discretion like Walmart. The S&P 500 fell 88 points or 1.46% while the Nasdaq fell 612 points or 3%.

The popularity of the Chinese AI, DeepSeek app has climbed the charts at app stores in the last week boasting it spent a fraction that other tech giants are spending on AI chips and other capital expenditures. The dog of the day goes to Nvidia down 17% after opening down 10%. Broadcom was also down 17% while other chip stocks and chip equipment stocks fell 5% or more. Big cap techs were also lower except for Meta and Apple. Apple was a standout up 3% ahead of earnings this week.

Derivative plays from the AI buildout such as utility firms that were expected to build out to meet the demand for AI are taking a hit. Constellation Energy and Vistra were both down over 20%.

Outside the tech space things are more constructive. The healthcare space was performing well with a number of drug stocks up 2% or more. J&J rose 4%. In the telecom space, AT&T rose 6% on strong earnings.

Consumer discretion and defensive stocks also performed well. Walmart, Costco, Coke, Pepsi, P&G, Home Depot and others were up 2% or more today.

Bond yields keep moving back down with the 10-year Treasury yield down nine basis points to 4.53%, while the 2-year Treasury yield fell 8 basis points to 4.19%. Fed funds futures are pricing in a more than 99% chance that the central bank leaves interest rates unchanged, according to CMEGroup's FedWatch Tool.

The price of oil continues to pullback, gold is down a percent while bitcoin is down 4% right at the $100,000 level.