U.S. stocks rebound one day after Nvidia-led AI rout, Nasdaq rises 2%: Live updates – CNBC

AI-power plays Vistra and Talen Energy are off their highs for the day, but the stocks have been trying to claw back some ground that was lost in Monday’s session. But the trend isn’t universal. Shares of Constellation Energy have been negative for most of the day, and were recently down about 3%. These stocks had been stellar performers in 2024, with Vistra ranking as the second best stock in the S&P 500 last year behind Palantir.

Shahriar Pourreza, senior managing director of power and utilities at Guggenheim Securities, told CNBC that investing in these names makes sense even without the expected demand from AI data centers. Saying data centers were “the cherry on top” of other growth drivers.

—Christina Cheddar Berk, Spencer Kimball

This week’s moves in Nvidia (NVDA) highlight the downside risk of leveraged, single-stock exchange traded funds.

Imagine you’ve been holding a 2x leveraged ETF tracking NVDA. (You can get that exposure from Direxion Daily Nvidia Bull 2x (NVDU), for example.) Monday’s 17% single-day decline for the underlying stock translated into a nearly 34% drop for your leveraged ETF. But recovering from that kind of loss isn’t as simple as just reversing the percentage drop.

To illustrate the point, check out Tuesday’s 6% gain in NVDA, as of midday. That move results in about a 12% rebound for NVDU but the ETF is still down 26% since Friday, compared to 12% for the underlying stock. Why? Because gains and losses are percentage-based on your new, lower starting point, you need to make up more ground from that lower base.

Here’s a simpler breakdown: Say your leveraged ETF started at $100. After Monday’s 34% plunge, it’s sitting at $66. To climb back to $100, the ETF needs a 52% gain even though the underlying asset would only need to rise 20% to return to its prior level.

Over time, downside moves can deteriorate the long-term returns of leveraged products, or what’s known on Wall Street as “leverage decay.” It’s not just the math that’s eating away at returns — it’s also the daily compounding effect. Volatility amplifies the decay, even if the underlying stock bounces around but remains flat over time.

— Nick Wells

There are some near-term “chinks in the armor” in ‘Magnificent 7’ stocks, according to Gene Munster, managing partner at Deepwater Asset Management.

Munster said Tuesday on CNBC’s “Money Movers” that after the DeepSeek shakeout, he has shifted to own smaller technology companies with a market cap of under $500 billion “as a point of diversification.” To be sure, Deepwater still owns Nvidia and some megacap tech names, and is sticking by those names for the long term.

“I continue to believe that we still have a couple years where this market’s going to continue to move higher. I think we’re far from the top of this,” Munster told CNBC. “I think it will end in a spectacular bursting of the bubble. I don’t think that the bubble bursted yesterday.”

He added that any disappointment from this week’s earnings from Microsoft, Meta and Tesla could results in a bit of a near-term sell-off.

— Pia Singh

Lilly Biotechnology Center is shown in San Diego, California, U.S. March 1, 2023.

Mike Blake | Reuters

Analysts are lowering price targets for Eli Lilly ahead of the company’s quarterly results on Feb. 6.

Eli Lilly already warned sales of its diabetes drug Mounjaro and obesity drug Zepbound are ramping up slower than expected. That has made the stock a bit of “a show-me story,” said Wells Fargo analyst Mohit Bansal. Although he expects the company can hit its revised forecasts for 2025, Bansal took his price target down to $970 from $1,000. Citi also revised its price target, taking it to $1,190 from $1,250.

According to LSEG, the average price target for Eli Lilly shares is $980.66, or more than 21% upside from where it is trading.

— Christina Cheddar Berk

The health care sector has been an outperformer amid a turbulent January, with the group closing above its 200-day moving average on Monday for the first time since November.

The iShares US Healthcare Providers ETF (IHF) is up 10.3% for the month, on track for its best month since 2021.

Health care stocks are outperforming in January.

While the sector’s outperformance on Monday is only part of its strong January, health care could continue to rally if the emergence of DeepSeek leads to a prolonged struggled for growth stocks, according to Barclays analyst Andrew Mok.

“Health Care remains the largest Underweight sector allocation with real-money investors decreasing allocations in Q4 likely due to post-election policy concerns. This has resulted in bottom-quartile valuations (vs 3-year history) across our coverage despite steady-to-improving fundamentals. Thus any sustained underperformance in Big Tech is likely to benefit Health Care broadly and help to renew interest in facilities and managed care,” Mok said in a note to clients.

— Jesse Pound

Monday’s sharp sell-off for technology stocks could endanger the trend higher for the broader sector, according to BTIG.

“While it’s still probably premature to call the end to tech leadership for this cycle, yesterday’s declines did do significant damage to tech’s relative trend which was already moderating,” BTIG chief market technician Jonathan Krinsky wrote Tuesday.

Despite the rough start to the week putting tech’s trend “in jeopardy,” Krinsky says other sector leaders could emerge and lead the market while also helping overall breadth improve.

— Brian Evans

A sign is posted on the exterior of a CrowdStrike office on July 30, 2024 in Sunnyvale, California. 

Justin Sullivan | Getty Images

Narrow leadership drove the market higher on Tuesday, underscoring the role of beat-down technology names in the market rebound.

While the S&P 500 climbed 0.7%, nearly seven out of every 10 of its members were heading for losses. On top of that, eight of the 11 sectors that comprise the broad index traded in the red.

But the index was able to rally in large part from the nearly 3% gain in the information technology sector. CrowdStrike and Nvidia were among the sector’s biggest gainers, rallying above 8% and 5%, respectively.

— Alex Harring

Technology stocks sold off on Monday, leading to big declines in both the S&P 500 and Nasdaq Composite.

But Piper Sandler says the overall market is still going strong.

“AI-themed stocks and economy were sharply lower yesterday as concerns surrounding China’s DeepSeek AI emerged as a potentially cost-efficient alternative to current AI platforms. Outside of AI stocks, the overall market showed resilience, with more stocks advancing than declining — a clear sign of strength beyond the AI sector as this market rally broadens out,” wrote chief market technician Craig Johnson.

— Lisa Kailai Han

Stocks do not appear oversold even with Monday’s rout, suggesting there is further downside ahead, according to Wolfe Research.

“Is it over for the AI names? Too soon to say, but as we have discussed for months, even that subset of the tape has been narrowing,” the firm’s Rob Ginsberg wrote Monday. “Despite today’s carnage of 10-30% declines across the board, most of the investor darlings are still not oversold, so another leg lower to setup the oversold bounce wouldn’t surprise us.”

“The eventual bounce will be the real tell. If it’s lackluster in nature, with no real thrust and stalls out at a lower high and beneath resistance, it’s most likely game over,” Ginsberg continued. “Time will tell, but there clearly has been some real technical damage.”

— Sarah Min

This photo shows details of an Airbus A320 passenger aircraft of JetBlue Airways in a maintenance hangar of the company at JFK International Airport in New York on March 4, 2024.

Charly Triballeau | AFP | Getty Images

Check out the companies making headlines in midday trading:

• JetBlue — Shares plunged 26% after the airline shared a disappointing cost outlook. JetBlue estimated that its unit costs, excluding fuel, could rise as much as 7% year over year in 2025 and 10% year over year for the first quarter. Despite this, JetBlue beat analysts’ estimates for its fourth-quarter results.
• Lockheed Martin — Shares of the aerospace and defense company dropped 8% after issuing disappointing forward guidance and top-line results. Lockheed posted revenue of $18.62 billion, while analysts polled by LSEG expected $18.91 billion. The company’s full-year earnings guidance range missed the consensus forecast, according to FactSet. 
• RTX — The defense stock climbed 2% on better-than-expected fourth-quarter results. RTX posted $1.54 per share on revenue of $21.62 billion. Analysts expected a profit of $1.38 per share on revenue of $20.54 billion. 

The full list can be found here.

— Hakyung Kim

Shares of JetBlue plunged around 27% in midday trading, putting the stock on pace to snap a three-day win streak and for its worst day on record. A close around this level would mark the stock’s largest percent decrease since Aug. 12, 2024, when it plummeted about 20.7%.

The move lower comes after the airline posted a disappointing cost outlook, forecasting that its unit costs, excluding fuel, will increase up to 7% in 2025 compared to last year. JetBlue also said its revenue could come in as much as 0.5% lower in the first quarter versus the prior year to as much as 3.5% higher.

JetBlue has also underperformed the broader market this month, falling nearly 25% month to date. That is coming off a positive year for the stock, which saw a 41.6% gain in 2024.

JBLU, 1-day

Timon Schneider | SOPA Images | Lightrocket | Getty Images

Hybrid bitcoin miners, or miners that also sell power to artificial intelligence companies, extended declines from Monday’s DeepSeek-driven sell-off as the market broadly rebounded.

Core Scientific and Iren, formerly known as Iris Energy, pulled back another 7% and 6%, respectively, after they each lost more than 30% Monday.

Bitdeer, which sells bitcoin mining rigs in addition to running its own bitcoin mining and AI data center businesses, jumped 7%. Benchmark’s Mark Palmer attributed the move up to the market’s recognition of its mining rig business as a revenue diversifier. It is still down 20% in two days.

Analysts from Piper Sandler and Cantor Fitzgerald said in notes Tuesday that the DeepSeek-driven sell-off is overdone and is creating good buying opportunities in bitcoin miners. H.C. Wainwright has a contrarian view on miners’ near-term monetization opportunities for AI, however. Analyst Mike Colonnese told CNBC that hybrid miners will underperform pure play bitcoin miners this year.

Pure plays Mara Holdings and CleanSpark were down just over 1% each on Tuesday.

— Tanaya Macheel

Cybersecurity stocks, which were mildly affected by Monday’s tech sell-off, rallied during Tuesday’s trading session.

Shares of CrowdStrike were last up nearly 8% to trade at an all-time high and on pace for their best-performing day since September 2024.

Palo Alto Networks rose 3.6%, while Zscaler added 7%. The stocks are respectively on track for their best days since Nov. 2024 and May 2024.

CRWD PANW ZS 5-day chart

Meanwhile, Fortinet rose 3.3%, while Okta gained 4.4%.

— Adrian van Hauwermeiren, Lisa Kailai Han

General Motors‘ rosy 2025 outlook may not be what it appears. The automaker unveiled a forecast for this year that calls for earnings to rise to a range of $11 to $12 per share, solidly higher than Wall Street’s consensus. However, the automaker isn’t making any guesses about the effect of tariffs on its results or changes in electric vehicle tax credits, saying its estimates assume a “stable policy environment.” That assumption is likely far from the reality it will face in the year ahead, and investors are punishing the stock as a result. Shares were recently down 9.5%.

During the earnings call, CEO Mary Barra said the company has “multiple playbooks” for the potential outcomes. “The reason that we guided to the status quo is because there are really infinite permutations on policy, and we didn’t want to get into advocacy in our guidance,” she said.

GM, 1-day

The Nasdaq-100 got routed Monday as concern over Chinese artificial intelligence startup DeepSeek sparked a sell-off in chipmakers such as Nvidia. The benchmark, which is made up of the 100 largest stocks in the Nasdaq, shed 3.1% during the session, its worst day since Dec. 18.

The index does have a history of rebounding after a decline of more than 2%, averaging a 0.2% advance the following session, according to Bespoke Investment Group. However, that hit rate is not strong, with the benchmark ending the following day higher just 55% of the time, Bespoke found.

NDX 5-day chart

Nvidia shares turned into the red shortly after Tuesday’s trading session kicked off, extending losses seen in the prior session.

Shares of the chipmaker were down about 1% shortly after 9:40 a.m., despite opening in the green about 10 minutes prior. The stock is now down nearly 18% on the week.

Nvidia, 1-day

Tuesday’s losses build on the 17% drop recorded in the prior session, which marked the stock’s worst day since March 2020. That came amid a global tech sell-off as Chinese startup DeepSeek’s artificial intelligence work raised alarm around U.S. spending and leadership within the technology.

— Alex Harring

A customer shops in the appliance department at a Lowe’s store in Hialeah, Florida, on May 12, 2021.

Joe Raedle | Getty Images

Orders for long-lasting goods such as autos, appliances and computers unexpectedly fell in December, the Commerce Department reported Tuesday.

Durable goods demand declined 2.2% for the period, the fourth drop over the past five months, including a 2% slide in November. Economists surveyed by Dow Jones had been looking for an increase of 0.5%.

However, excluding transportation, orders showed a 0.3% increase. Nondefense aircraft and parts orders tumbled 45.7%.

— Jeff Cox

Artur Widak | Nurphoto | Getty Images

Morgan Stanley says that while it is staying positive on major semiconductor names such as Nvidia, it is reducing its price targets on them following Monday’s broad sell-off over DeepSeek concerns.

Analyst Joseph Moore cut hits price target on Nvidia shares to $152 from $166, which indicates 28.3% upside from Monday’s close. The stock plunged 17% on Monday.

For Marvell Technology shares, Moore lowered his price target by $7 to $113, or 12.6% above Monday’s close price. The analyst also decreased his price target on Broadcom to $246 from $265 per share, implying shares gaining 21.7% from where they closed Monday.

Micron Technology shares are currently trading around the level of Morgan Stanley’s new price target. Moore issued a new target price of $91 per share, down from $98.

— Hakyung Kim

Check out some of the companies making headlines in premarket trading:

• Nvidia — The artificial intelligence darling bounced back about 3% after plunging 17% a day earlier. Shares of peer firms with large AI exposure such as Broadcom and Oracle also ticked up, rising more than 2%.
• Boeing — The aerospace stock was less than 1% lower after fourth-quarter results missed analysts’ estimates. Boeing reported an adjusted loss of $5.90 per share, while analysts polled by LSEG expected a loss of $3. Boeing’s fourth-quarter revenue of $15.24 billion also missed estimates that called for $16.21 billion.
• Autodesk — Shares of the software company advanced more than 2% following an upgrade to outperform from neutral at Mizuho Securities. Analyst Siti Panigrahi cited a potential recovery in the industrial data sector as well as an improving macro backdrop could signal upside ahead.

Read the full list here.

— Brian Evans

Despite a tough sales outlook in the near-term, Oppenheimer sees reasons to like CNH Industrial.

Analyst Kristen Owen upgraded the agricultural and construction equipment maker to outperform from perform. Owen’s new $16 price target implies shares can climb 21.6% over Monday’s closing level.

“Now into the second year of equipment sales declines, we believe CNH is approaching trough EPS in 2025,” Owen wrote to clients in a Tuesday note. “Coming out of 3Q earnings season, investor sentiment in the space has improved, and we see incremental catalysts in 2025 helping to support a reversion trade for CNH.”

Owen said CNH is coming into 2025 with a “lowered bar” given the negative sales expectations. Though she admitted that 2025 equipment fundamentals are “challenging,” she said higher grain prices can help farm incomes — which could, in turn, allow them to buy CNH products.

The analyst also pointed to potential cost savings programs and a construction monetization plan, as well as the investor day, as possible catalysts for the stock.

Shares ticked higher by 0.2% in Tuesday’s premarket. CNH’s stock has jumped more than 16% so far this year, reversing course after 2024’s 7% slide.

— Alex Harring

Igor Golovniov | Lightrocket | Getty Images

Autodesk shares rose more than 2% before the bell on Tuesday after Mizuho suggested that the stock has a lot more room to run.

Analyst Siti Panigrahi raised his price target on the stock by $120 to $400, which implies shares can rally 33.7% over Monday’s closing level. Panigrahi also hiked his rating on the software stock to outperform from neutral.

“Signs of recovery in industry data, positive channel checks and improving macro trends, further reinforce our positive outlook on ADSK fundamentals,” Panigrahi told clients in a Tuesday note. “The resilient business momentum amid improving macro trends and industry challenges are encouraging.”

Autodesk, 1-day

The company’s new transaction model can drive up revenue growth and aid both free cash flow and margins, the analyst said. Looking ahead, Panigrahi said cloud and generative artificial intelligence can act as secular tailwinds for Autodesk’s growth over the long term.

Autodesk has added just over 1% so far in 2025. It gained more than 21% in the prior calendar year.

— Alex Harring

Nvidia shares rose more than 2% in after-hours trading, attempting a slight comeback after the artificial intelligence darling saw its shares plunge 17% during the regular trading session.

That fall, sparked by fears from the emergence of Chinese AI startup DeepSeek, resulted in a market cap loss for Nvidia of close to $600 billion, the biggest drop in history for a U.S. company. Nvidia had its worst day since March 16, 2020.

Shares of Nvidia are now down 11.8% this year. The stock is up about 94% over the past year.

— Pia Singh

Scott Bessent speaks as he testifies during a Senate Committee on Finance confirmation hearing on Capitol Hill in Washington on Jan. 16, 2025.

Kevin Lamarque | Reuters

The U.S. Senate voted on Monday to confirm Scott Bessent as Treasury secretary in President Donald Trump’s administration.

The Senate voted 68-29 to confirm Bessent, an investor, hedge fund manager and billionaire political donor who once worked with George Soros. He will be the 79th Treasury secretary.

Bessent is pushing a gradual 2.5% universal U.S. tariffs plan, the Financial Times reported Monday evening. The levies could go up to as high as 20%, the report said.

— Pia Singh

U.S. President Donald Trump speaks to the press before boarding Marine One on the South Lawn of the White House in Washington, D.C., on Jan. 24, 2025.

Roberto Schmidt | Afp | Getty Images

U.S. President Donald Trump said Monday evening that Chinese artificial intelligence startup DeepSeek should serve as a “wake-up call” for American industries.

“The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser focused on competing,” Trump said. “Instead of spending billions and billions, you’ll spend less, and you’ll come up with, hopefully, the same solution under the Trump administration. We’re going to unleash our tech companies, and we’re going to dominate the future like never before.”

The emergence of DeepSeek’s competitive — and cheap — open-source AI model rattled markets on Monday and ignited fears that U.S. hyperscale tech spending could prove excessive in creating competitive AI models.

“I think maybe this is really more of a China-U.S. issue than people think,” Larry Benedict of The Opportunistic Trader said after the previous session’s sell-off. “That makes me a little bit more fearful.”

— Pia Singh, Jesse Pound