Technology is selling out, but AI can still rule the markets

This is a report from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open provides investors with information on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Tech drags down the Nasdaq
US markets were Mixed Monday. The S&P 500 and Dow Jones industrial index rose, but Nasdaq Composite fell amid a broad technology selloff. Mainly markets in the Asia-Pacific region stocks traded higher on Tuesday. China’s CSI 300 rose about 2.7%, while Hong Kong’s Hang Seng Index added 2.3%. of Japan Nikkei 225single emission, fell nearly 2% as the yield on the country’s 40-year government bond rose to 2.766%, the highest since 2007, LSEG data showed.

US Steel’s potential new bet
Cleveland Rocks cooperates with the opponent Nukor in a potential rate for US Steelthe absorption of which by Japan Nippon Steel was blocked by the White House earlier this month, sources told CNBC’s David Faber. The offer will be a high stake of US$30. Nippon had planned to buy US Steel for $55 a share in a deal valued at more than $14 billion.

Electric car boom in China to slow in 2025: HSBC
Sales of new energy vehicles in Chinawhich include only battery and hybrid vehicles, will grow by only 20% in 2025, forecast HSBC analysts. That’s a sharp drop from 42% growth in 2024, according to data from the China Automobile Association. According to the association, NEV penetration in new car sales exceeded 50% by the second half of the year.

Additional restrictions on the export of microcircuits
The US will be formidable new export restrictions on artificial intelligence chips, depending on the level in which countries are classified, the US government announced on Monday. For example, close US allies will not face restrictions on access to artificial intelligence chips. Nvidia, the largest supplier of artificial intelligence chips, on Monday called the rule “excessive”.

Is Elon Musk buying TikTok US?
The Chinese government is considering a plan to sell TikTok’s US operations to Elon MuskBloomberg News informed Monday, citing anonymous sources. This would allow TikTok to continue operating in the country if the US Supreme Court decides to uphold the law, which would effectively ban Chinese-owned TikTok in the US.

(PRO) Opportunities beyond the Magnificent Seven
The Magnificent Seven’s stock delivered a 23% return on the S&P 500 in 2024. While the portfolio manager expects these stocks still have room to run this year, he advises investors to be selective about the Magnificent Seven — and see opportunities in technology stocks outside of this basket.

The tech-heavy Nasdaq Composite lost 0.38%. Big tech names popular with investors fell overall in the session on Monday. Palantir – that the most effective actions on the S&P last year — is down 3.4%, while Nvidia lost 2%, building on its losses over the past week. Nvidia fell nearly 6% over the period, while Palantir lost more than 15%.

“In our view, this is a necessary part of the correction phase, and we’re probably further along in that correction than many investors believe because many stocks peaked in late November, early December,” said AXS Investments CEO Greg Basuk, adding , that Friday’s jobs report “reinforced those concerns.

However, the S&P 500 added 0.16% and the Dow Jones Industrial Average rose 0.86% as investors switched to non-tech stocks such as Amgen, Caterpillar and UnitedHealth.

That doesn’t mean these sectors will take over as market leaders anytime soon — or at all. Sector rotation is a common occurrence in the markets as investors secure their profits and look for the next stock with growth potential. I amid rising rates putting more pressure on growth-oriented tech stocks than the value stocks that typically make up the Dow.

Also, the artificial intelligence craze isn’t over, judging by the latest salary reports from TSMC and Foxconn, which trades as Hon Hai Precision Industry. Both companies saw revenue growth thanks to strong demand for AI-related products.

A long-term rotation from technology and artificial intelligence is unlikely. But one in the field cannot be rejected.

— CNBC’s Samantha Subin, Hakyun Kim and Brian Evans contributed to this report.