Closing summary
A sell-off of global technology shares has wiped up to $1 trillion off US stock markets, with the US chipmaker Nvidia falling more than 13%, and losing $465bn off its market value – the biggest such loss in US market history.
The popularity of a new Chinese AI app from the start-up DeepSeek, which has called US dominance into question, is behind the rout.
US markets have recouped some of their losses and the Nasdaq is now down by 2.65% after tumbling by 3.53% at the open, or 704 points, to 19,250.
Over here, the UK’s FTSE 100 index is now slightly positive at 8,507 while the pan-European Stoxx 600 is also just in positive territory. Germany’s Dax is down 0.3% while the CAC in Franc is just negative and the Italian borsa is up by 0.1%.
Our other main stories:
Thank you for reading. Take care! – JK
The DeepSeek AI threat has wiped up to $1 trillion of US stock markets, noted Axel Rudolph, senior technical analyst at online trading platform IG.
The Nasdaq 100’s near 4% and S&P 500 over 2% pre-market drop, following China’s DeepSeek R1 AI, which surpassed ChatGPT as the top free app on the US App Store and apparently cost less than $6m to develop, made investors question lofty US tech valuations.
Nvidia shares sank by 13%, erasing $465bn in market value. Falling US Treasury yields and bargain hunters helped US indices recover with the Dow flatlining, S&P 500 trading less than 1.5% lower and Nasdaq down less than 2.5% in the end.
European indices were mixed, some like the FTSE 100, Italian and Spanish stock indices regained all of their Monday losses and ended up in positive territory on the day. German business morale edging up and US home sales topping expectations played second fiddle amid a day of high volatility.
Russ Mould of stockbroker AJ Bell said:
There is a new AI challenger in town and investors are spooked at what they’ve discovered. China’s DeepSeek last week revealed how to build a large language model on a budget that can learn and improve without human supervision. Its assistant is free to use and runs off lower-cost chips and less data – implying a major challenger to the established AI names in the West.
Investors are slowly digesting the news and portfolio readjustments are causing some of the big tech names to pull back. In Asia, AI investor SoftBank fell 8% on Monday while Tokyo Electron slipped 4.9%. In Europe, ASML crashed by 9%. Futures prices also imply a bad day for the Nasdaq when US markets open later on, with the tech-heavy index indicated to fall 3%. These market movements suggest investors are worried about disruption to what has so far been an easy ride for most stocks linked to the AI theme.
The AI super-race is seeing new challengers emerge and not everyone is going to win. The companies that enjoyed first-mover advantage will now be under pressure to launch something even better or be left behind. It’s natural evolution – when someone launches a product or service that sees strong demand, someone else will always try to come along with something cheaper to undercut the market leaders.
The US government – both under Donald Trump and previously under Joe Biden – have been trying to stop China from accessing Western technology. That strategy might have backfired as it looks to have encouraged China to ramp up efforts to build its own technology and we’re now seeing evidence that the country is making waves.
Nvidia's $465bn DeepSeek sell-off biggest in market history
The 13% plunge in Nvidia shares, fuelled by investor worries about Chinese artificial-intelligence startup DeepSeek, wiped a record amount of stock market value from the world’s largest company.
Nvidia shares tumbled after the opening bell Monday, erasing about $465bn from the company’s market value. That eclipsed the previous record — a 9% drop in September that wiped out $279bn in value — and was the biggest in US stock market history, according to Bloomberg News.
Russ Mould, chief market analyst at the stockbroker AJ Bell, has helped us work out the earlier decline in the Nasdaq in dollar terms.
According to Refinitiv, the Nasdaq Composite had a market cap of $32.5 trillion as of the close on Friday, and the earlier 3.5% decline wiped $1.1 trillion off the value of the index. It is now down by 2.35%.
News last week that the Chinese startup DeepSeek has built an artificial-intelligence model competitive with Western rivals for a fraction of the cost, and its popularity over the weekend, has sparked a panic in the chips sector.
Nvidia has sold off with the shares now down 13.5%, wiping more than $400bn off its market value.
Updated
Big Tech slump pushes Nasdaq sharply lower amid China's AI push
The opening bell has rung on Wall Street, and technology stocks have plunged, with the tech-heavv Nasdaq losing 3.5%.
The Nasdaq and the S&P 500 fell to their lowest levels in more than a week, as the popularity of a low-cost Chinese AI model rattled global technology stocks.
The Nasdaq tumbled by more than 700 points to 19,250, as the US chipmaker Nvidia fell by 12.3%, wiping $380bn off the company’s market value and taking it to $3.1trn.
Microsoft, Meta Platforms and Google parent Alphabet lost between 2.2% and 3.6% while AI server makers Dell Technologies and Super Micro Computer slid by 7.2% and 8.9%.
The broader S&P 500 lost 130 points, or 2.1%, at the open while the Dow Jones fell by 260 points, or 0.6%. The S&P 500 information technology sector has lost 4.6%, and is on track for its biggest daily decline since September 2022.
European and Japanese tech stocks have also slumped as the emergence of a Chinese chatbot competitor to OpenAI’s ChatGPT, DeepSeek, raised doubts about the sustainability of the US artificial intelligence boom.
The DeepSeek AI assistant topped the Apple app store in the US and UK over the weekend, above OpenAI’s ChatGPT.
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Lagarde warns of 'vicious circle' if central bank independence is undermined
Central bank independence is being challenged in parts of the world and greater political influence could undermined banks’ ability to keep inflation down, risking economic volatility, according to European Central Bank president Christine Lagarde.
Donald Trump said last week he would demand that the Federal Reserve lower borrowing costs, claiming that he knew interest rates much better than people in charge of making that decision.
While the comment is considered more rhetoric than a plan to curtail the Fed’s independence, politicians have been encroaching on an area that has been off limits to them for decades.
Lagarde told a Hungarian central bank conference:
While recent research suggests that de jure central bank independence has never been more prevalent than it is today, there is no doubt that the de facto independence of central banks is being called into question in several parts of the world.
She warned that political interference could lead to a “vicious circle” that might result in central bank independence being undermined.
Political influence on central bank decisions can also contribute substantially to macroeconomic volatility.
The Fed is expected to keep interest rates on hold on Wednesday while the ECB is likely to cut rates by a quarter point a day after. America’s central bank will argue that inflation is coming down only slowly and that some policy proposals of the Trump administration could increase price pressures.
Lagarde said persistent political pressure on a central bank increases exchange rate volatility, and raises bond yields and the risk premia. This sort of volatility could make it more difficult to keep inflation down, raising concerns that independent central banks are failing to deliver on their mandates, she argued.
Such a sequence of events, she said, could then undermine the social consensus and further amplify volatility in the economy.
She spoke in a video address to Hungary, where prime minister Viktor Orban’s political ally, former finance minister Mihaly Varga, was appointed as the bank’s next governor from March.
Jean Boivin, head of BlackRock Investment Institute, speaking after Lagarde, said independence is not a given.
We haven’t been in a situation where we have to deal with inflation at such a high debt level.
The conflict that’s going to create to me is real.
That independence is not something you just assert, it’s something you need to manage and that management is going to get really tricky now going forward.
Many central banks ramped interest rates up in recent years to combat soaring inflation, limiting government’s ability to spend just as rapid price growth eroded real incomes.
Peter Kazimir, Slovakia’s central bank chief and an ECB policymaker, expects more conflict with governments over this inflation response. Kazimir said in Budapest:
Finance ministers and central bank governors are not in the same boat, this temptation to play the blame game is pretty high, especially when inflation is so high.
We were the best friend of finance ministers with very low rates. But we are not anymore.
Gyorgy Matolcsy, Hungary’s outgoing central bank chief, who clashed with Orban at times, also backed independence.
Sometimes there will be fights, skirmishes, debates, but you have to be adamant for keeping your central bank independent.
Updated
On the subject of automation and artificial intelligence:
The automation of millions of jobs will increase inequality in the UK unless the government intervenes to support small businesses and workers through the transition, according to a report into the future of work.
Ministers need to act in the interest of those who will be made unemployed or whose jobs dramatically change, says the report by the Institute for the Future of Work (IFOW) thinktank, in order to prevent skills shortages hitting employers and workers from suffering a decline in job satisfaction and wellbeing.
Artificial intelligence software is expected to become a widespread tool in factories, offices and in the public sector, demanding new skills, the IFOW said. However, a survey of 5,000 UK employees found “a pervasive sense of anxiety, fear and uncertainty” about the introduction of AI technology, and what it could do to their work.
TikTok is back in the US – but Apple and Google are not sure if it should be.
The short video app has yet to appear on the tech companies’ app stores, reflecting an unease about the White House executive order that has given TikTok the confidence to resume operations after temporarily shuttering the service on 18 January. Apple and Google do not appear to agree.
The legislation forbade companies from distributing, maintaining or updating TikTok – for instance, selling it on an app store – after a deadline of 19 January. But the executive order, signed within hours of Donald Trump’s return to the White House, suspended for 75 days enforcement of an act that demanded the Beijing-based owner of TikTok, ByteDance, sell the app’s US operation or face a de facto ban.
The order seeks to reassure companies that work with TikTok that they will not be prosecuted for keeping the social media app on US users’ smartphone screens. It also instructs the attorney general – who leads the Department of Justice (DoJ) – to issue a letter reassuring those entities that the law has not been violated and there is no liability for their conduct.
Bond yields fall, yen and Swiss franc jump in rush for safe-haven assets
Bond yields have fallen, as investors rushed to buy government bonds, considered a safe investment, amid the global sell-off in tech stocks – triggered by the popularity of a new free Chinese artificial intelligence app.
The yield, or interest rate, on Germany’s 10-year bond, the benchmark for the eurozone, fell by 7 basis points to 2.476%, after rising to 2.569% on Friday. Yields move in opposite direction to prices. The Italian bond yield fell by 4 basis points to 3.616%.
In the UK, the 10-year gilt yield dropped by 6 basis points to 4.574%.
The Japanese yen and the Swiss franc jumped against other major currencies in the rush for safe-haven assets. The yen rallied by 1.3% versus the dollar, rising as high as 153.73, its highest level since mid-December. The Swiss franc rose by nearly 1% to $0.8972.
The dollar gave up earlier gains and is now down by 0.3% against a basket of major currencies.
Further plans for US tariffs are also on investors’ minds, ahead of several central bank meetings later this week, including the US Federal Reserve, which is expected to hold interest rates steady on Wednesday, and the European Central Bank on Thursday, which is expected to cut rates by a quarter point.
The United States and Colombia pulled back from the brink of a trade war on Sunday after Colombia agreed to accept military aircraft carrying deported migrants.
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Deutsche Bank analyst George Saravelos has looked at China’s AI push and what it means for the world.
The emergence of a new AI technology at much cheaper development cost should be interpreted as a broadly positive supply shock, he said.
The benefits of AI would disseminate to the global economy at faster speed and bigger scale, ultimately allowing for faster productivity gains. From a global macro perspective this translates to higher growth but less inflation, ultimately positive for bond and equity markets at the same time. If technology dissemination is more global and reduces a US-specific technological advantage, the impact should be considered to be a marginal dollar negative.
But what about the short- to medium-term implications?
The clearest analogy that comes to mind is the DotCom unwind of the 2000s. What was the impact?
A large equity sell-off that spilled over to the real economy and led to a mild recession led by a capital expenditure unwind;
By extension, a more dovish Fed and a rally in bond markets;
An initially mixed reaction to the USD on risk-aversion but ultimately a weaker dollar via an unwind of equity inflows and narrowing rate differentials versus the rest of the world.
All of the above need to be considered in the context of a new US administration with a potentially more activist president, where we would add a few additional implications:
The odds of a more aggressive net fiscal easing would likely go up;
The odds of a potentially more aggressive containment policy vis-à-vis China would likely go up, in the context of a shrinking technological lead;
The odds of a more aggressive non-China tariff policy in the context of greater US growth vulnerabilities would go down.
He added:
Taking it all together we would assess the incoming newsflow as ultimately working in a dollar negative direction, even if the initial market reaction has been dollar positive. We are not changing any views for now but we are certainly attentive to the sharpness of US equity moves in the context of what is interpreted as a major technological advancement.
Updated
Ryanair hints fares could go up
Ryanair has cut its forecasts for passenger growth, blaming delays in new planes from US manufacturer Boeing, and hinted that fares could go up in the coming year.
The Irish budget airline said it expects to carry 206m passengers during the year to March 2026, down from the 210m previously targeted.
Boeing has been struggling to raise its rate of production of its bestselling 737 Max, a year after a mid-air door panel blow-out focused intense scrutiny on its safety record. Kelly Ortberg was brought in to turn the company around, only to face crippling strikes over pay at its Seattle factories.
Neil Sorahan, Ryanair’s chief financial officer, said that Boeing delays were “the only thing that’s behind the cut in the traffic”. “The ramp-up after the strike wasn’t as fast as we’d have liked,” he said.
However, Sorahan said that Boeing’s management appeared to be doing a better job, and that morale was good on the factory floor on a recent visit to Seattle.
Ryanair’s profits after tax fell by 12% in the first nine months of its 2025 financial year to €1.94bn (£1.6bn). Sorahan said that was caused by the “need to stimulate customers back at the start of the year” with lower fares.
However, Sorahan said the European airline industry would be “capacity-constrained”, which would lead to upward pressure on prices.
We’ve turned a corner on fares. In a capacity-constrained market my gut would say that fares will be up in the coming year.
The delays to Boeing deliveries of new planes are preventing Ryanair from taking full advantage of rising demand for air traffic. Most forecasts for global air travel suggest that flight numbers will increase rapidly in the coming decades, with a consequent increase in carbon emissions in the absence of carbon-neutral fuels such as sustainable aviation fuel.
Here is the full story on Good Energy
Morgan Stanley has cut its forecast for UK growth this year to 0.9% from 1.3%, mirroring estimates from Wall Street rivals Goldman Sachs and JP Morgan.
The US investment bank cited a slowdown in the economy and signs of labour market weakness.
The Bank of England has predicted growth of 1.5% this year, partly due to a short-tem boost from an increase in public spending announced by Rachel Reeves, the chancellor.
The UK government is under growing pressure to get momentum back into the economy amid warnings that businesses plan to cut jobs and raise prices, while millions of families believe their finances will worsen this year.
Before a major speech this week by Reeves, designed to restate Labour’s commitment to improving the economy, the CBI said private sector firms were urgently assessing their budgets to offset measures announced in last October’s budget.
The lobby group said it expected another “significant fall” in business activity over the next three months. This measure has now been flat or falling since mid-2022, when Liz Truss was briefly prime minister.
Alpesh Paleja, the interim deputy chief economist at the CBI, said:
After a grim lead-up to Christmas, the new year hasn’t brought any sense of renewal, with businesses still expecting a significant fall in activity.
Updated
Good Energy agrees to takeover by Dubai firm
Britain’s Good Energy has struck a near £100m takeover by a company controlled by a member of Abu Dhabi’s ruling family.
The retail energy company said it had agreed a deal with Dubai-headquartered Esyasoft for a cash offer of £4.90 per share, valuing it at £99.4m.
The share price of Good Energy, listed on London’s junior Alternative Investment Market, rose by a fifth this morning to £4.75. The offer was two-thirds higher than Good Energy’s share price on the day before Esyasoft’s interest was first revealed in October.
Esyasoft is ultimately controlled by the Abu Dhabi International Holding Company (IHC), the investment company chaired by Sheikh Tahnoun bin Zayed Al Nahyan, the son of the United Arab Emirates’ founder, and part of the Abu Dhabi ruling family.
IHC owns companies involved in oil and gas drilling, including servicing the huge growth of the US shale gas industry. However, IHC also counts solar power among its investments, and Esyasoft focuses on power distribution.
Good Energy serves about 245,000 customers in the UK, providing 100% renewable electricity as well as specialising in letting customers sell solar power back to the grid. It was founded in 1999 by Juliet Davenport, who left the company in 2021.
The takeover would give a windfall to energy entrepreneur Dale Vince, whose holding company Green Britain Group is the largest shareholder in Good Energy, with a 26% stake.
Nigel Pocklington, chief executive of Good Energy, said:
Today we have an opportunity with a partner that shares our sustainable energy vision and has the resources to accelerate our purpose substantially. Whilst the board remains confident in Good Energy’s strategic delivery as a publicly listed company, Esyasoft’s financial resources, in addition to its presence in new markets, present a significant increase in our potential. The offer values the company at a significant premium, offering shareholders a good return for their support for the company.
Davenport offered her backing for the deal. The investment would give the “opportunity to scale the Good Energy propositions” and “make a real difference to climate change”, she said.
I founded Good Energy 25 years ago to be a pioneer in the provision of clean power to all customers in the UK.
The energy industry back then was very different, founded around fossil fuels and designed to be a centralised system.
Carsten Brzeski, global head of macro at ING, has looked at the German Ifo numbers.
The slight increase in Germany’s most prominent leading indicator does not yet signal an imminent economic rebound. Instead, the economy remains stuck in stagnation with more downside than upside risks in the short term.
As Lola Young, one of Britain’s new musical talents, sang last year, “There’s a flicker of light; without the dark, the stars can’t shine bright”. Today’s Ifo index is such a flicker of light for the German economy, admittedly a very vague one.
Germany’s most prominent leading indicator came in at 85.1 in January from 84.7 in December, but still below its 85.6 in November. While the current assessment component increased to the highest level since late summer, expectations dropped once again to the lowest level in a year.
It’s obvious that the results of the US elections and policy uncertainty in Germany ahead of the upcoming elections are still weighing on sentiment.
Looking ahead, it will take at least until the German elections on 23 February and the following coalition negotiations before the economy can get a new, hopefully positive, impulse. Until then, the downside risks will dominate with the potential economic policies from the new US administration.
Some 10% of German exports go to the US (of which the largest part is automotive) and any US tariffs would hit an already beleaguered sector. However, even more important is the impact that tax cuts and deregulation in the US – combined with already low energy prices – would have on German competitiveness, which is clearly negative. German companies might step up investments in the US at the cost of investments in Germany.
As reported earlier, GSK will spend up to £50m on a project with the University of Oxford to investigate whether vaccines could be used to prevent some cancers.
Scientists are increasingly optimistic about the potential for cancer vaccines, which aim to help the patient’s own immune system fight against cancers. Some of the vaccines already undergoing tests on patients, including in the UK, and interventions are tailored to the individual’s tumours.
“Cancer does not come from nowhere,” said Sarah Blagden, the professor of experimental oncology at Oxford, in an interview with BBC Radio 4’s Today programme.
Cancers can take up to 20 years, sometimes even more, to develop. The normal cell transitions to become cancerous. At that point most cancers are invisible.
The purpose of the vaccine is not to vaccinate against established cancer, but to actually vaccinate against that pre-cancer stage.
Blagden will lead the research programme alongside Timothy Clay and Ramon Kemp of GSK.
German business sentiment improves unexpectedly
In Germany, Europe’s largest economy, business sentiment unexpectedly improved this month.
The Ifo institute said its business climate index increased to 85.1 in January, from 84.7 in December, mainly due to a more positive assessment of the current situation.
However, expectations for the future worsened again, as companies continue to be pessimistic.
In manufacturing, business sentiment worsened further, as companies were even more skeptical about the coming months while saying the current business situation had improved. Incoming orders continue to decline. Capacity utilisation remained little unchanged at 76.5%, well below the long-term average of 83.4%.
In the service sector, the index rose significantly, as companies assessed their current business situation as considerably better, while expectations also improved. In particular, IT service providers viewed their outlook as less negative.
In trade, business sentiment was unchanged, as wholesale traders assessed their current situation as more positive. However, expectations were slightly more pessimistic, driven by retailers.
In construction, confidence worsened again due to companies’ poorer expectations, while the current situation was viewed as slightly better.
European tech stocks rattled by China's AI push
The pan-European Stoxx 600 has lost 0.75% this morning, with technology stocks down by 4.5%.
The Dutch chipmaker ASML slid by 8.2% while Germany’s Siemens Energy, which provides hardware for AI infrastructure, lost 4.1% and France’s digital automation firm Schneider Electric fell by 6.8%.
Frankfurt-listed shares of Nvidia dropped by 7%, while Tesla , Amazon and Meta fell by more than 2% in early European trading.
Last week, the Chinese lab DeepSeek has rolled out a free AI assistant that it says uses lower-cost chips and less data, kicking off a global AI race. It threatens to challenge the assumption in financial markets that AI will drive demand along a supply chain from chipmakers to data centres.
DeepSeek unveiled R1, an AI that analysts say rivals OpenAI’s top reasoning model, o1. Astonishingly, it matches o1’s capabilities while using a fraction of the computing power – and at a tenth of the cost.
Wong Kok Hoong, head of equity sales trading at Maybank, told Reuters:
It’s a case of a crowded trade, and now DeepSeek is giving a reason for investors and traders to unwind.
Shares in AI-focused startup investor SoftBank slid by 8.3%. Last week the Japanese firm announced a $19bn commitment to fund Stargate, a data-centre joint venture with OpenAI.
Updated
Richard Hunter, head of markets at the investment platform interactive investor, has looked at the Chinese startup DeepSeek.
Its new AI app comes ahead of corporate results from the big US tech companies.
There appears to be a new kid on the tech block and the early signs are that the last week of January will provide the first sustained bout of volatility in the New Year.
Chinese AI company DeepSeek has released a new product which has a fraction of the development costs seen in the US and which could also provide some defence against any restrictions placed on China by the US as this particular battle intensifies. Japanese chip-related stocks dropped sharply overnight and although it is too early to say with total certainty, US futures are currently looking weak ahead of the opening bell today.
It is far too early to describe DeepSeek as an existential threat to US-based AI solutions. By the same token, it will almost certainly put the cat among the pigeons as investors scramble to assess the potential damage it could have on a burgeoning industry which has powered much of the gain seen in the main indices over the last couple of years. The emerging news over the weekend of an emerging threat to the US dominance seen thus far comes ahead of a week which sees four of the “Magnificent Seven” report earnings, namely Meta Platforms, Microsoft, Tesla and Apple. Quite apart from the results they provide, the larger question has suddenly become whether the hundreds of billions of dollar investment in AI needs re-evaluation.
The news comes after a weaker close on Friday for the US market, when the benchmark S&P 500 gave up gains which saw it briefly break new highs, and ended the week 0.3% lower. Hunter added:
The new president’s pro-business rhetoric has been positive for the markets to date, while his promised severe actions on tariffs have yet to materialise, at least for the moment. Despite the weakness and leading into the end of January, the Dow Jones has added 4.4% so far this year, with gains of 3.7% and 3.3% for the S&P500 and Nasdaq respectively.
Quite apart from any AI considerations, investors will need to spin several plates this week. Corporate updates switch into top gear, with releases from the likes of Boeing, Starbucks, Intel, IBM, Chevron and Exxon Mobil after what has been a promising start to the season.
The core Personal Consumption Expenditures report will also be released on Friday and, while the Federal Reserve’s preferred measure of inflation will give the latest view on rising prices, it will also come after the Fed has announced its latest interest decision, where the market has overwhelmingly priced in a no-change decision.
Shares in WHSmith jumped as much as 8% after it put its 500 UK high street stores up for sale.
The surprise move to hoist the “for sale” sign over its over its legacy retail business creates uncertainty for its 5,000 staff, but was welcomed by investors.
The 232-year-old chain is in talks with a handful of potential bidders, having kicked off the prospective sale process at the end of last year.
While negotiations are focused on its 500 shops – which sell newspapers, books, stationery, cards and gifts – it is understood that the use of the brand itself will be up for negotiation with any prospective buyer.
Introduction: GSK strikes £50m deal with Oxford University on cancer vaccines; dollar rises after Trump U-turn on Colombia tariffs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Britain’s second-biggest drugmaker GSK has struck a deal with the University of Oxford under which it will pump up to £50m into early cancer research to develop new treatments.
The partnership lasts at least three years, and will focus on how cancer develops that could inform future development of cancer vaccines.
Most cancers take years or even decades to develop from normal cells to precancerous cells to cancer. Oxford University specialises in the study of precancer biology including the identification and sequencing of neoantigens, or tumour-specific proteins that prompt the immune system to recognise cancer. An active intervention like a vaccine or targeted medicine could prevent them from progressing to cancer.
Professor Irene Tracey, vice-chancellor of the University of Oxford, hailed the partnership as “a step forward in cancer research”.
Tony Wood, GSK’s chief scientific officer, said:
We’re pleased to further strengthen our relationship with Oxford University and to combine the deep knowledge of Oxford and GSK scientists. By exploring precancer biology and building on GSK’s expertise in the science of the immune system, we aim to generate key insights for people at risk of developing cancer.
GSK already has a partnership with the Institute of Molecular and Computational Medicine in Oxford, which focuses on neurological diseases, as well as other collaborations including one with the University of Cambridge announced in October, which focuses on hard-to-treat kidney and respiratory diseases.
The US dollar rose after Donald Trump threatened tariffs and sanctions on Colombia for turning away military aircraft carrying deported migrants, before a last-minute deal was agreed.
The dollar is up by 0.3% against a basket of major currencies.
The US and Colombia pulled back from the brink of a trade war on Sunday after the White House said the Colombians had agreed to accept military aircraft carrying deported migrants.
In a statement late on Sunday, the White House said Colombia had agreed to accept the migrants and Washington would not impose its threatened penalties.
European stock markets have opened lower, and US stock futures and several Asian markets have also fallen after the Chinese startup DeepSeek launched a free open-source AI model to rival OpenAI’s ChatGPT.
Traders are worried about the impact of the low-cost Chinese app on Western tech stocks.
The UK’s FTSE 100 index dropped by 0.3% or 31 points, to 8,470, while Germany’s Dax lost 0.9%, France’s CAC was flat and Spain’s Ibex and Italy’s FTSE MIB both fell by around 0.3%.
In Asia, Japan’s Nikkei fell by 0.9% with tech stocks down, while Hong Kong’s Hang Seng rose by 0.6% and South Korea’s Kospi gained by 0.85%. In mainland China, the Shanghai Composite slipped by 0.06% while the Shenzhen Composite fell by 1.3%.
The Agenda
9am GMT: Germany Ifo Business confidence for January
3pm GMT: US New home sales for December
3.35pm GMT: ECB President Christine Lagarde speaks
Updated
