Stock market today: Global stocks advance ahead of the Fed's rate decision as panic over AI fades

[January 29, 2025]  By ZIMO ZHONG

HONG KONG (AP) — Global stocks mostly advanced Wednesday in thin Lunar New Year trading following a rebound on Wall Street driven by tech stocks, as investors focused on the Federal Reserve’s rate decision due later in the day.

France’s CAC 40 lost 0.4% in early trading to 7,867.03, while Germany’s DAX added 0.4% to 21,516.18. Britain’s FTSE 100 edged less than 0.1% higher to 21,516.18. The future for the S&P 500 was up 0.1% while that for the Dow Jones Industrial Average dropped 0.1%.

Dutch semiconductor company ASML on Wednesday announced a record revenue of 9.3 billion euros ($9.7 billion), reflecting strong demand for its advanced chipmaking tools despite recent concerns about AI spending raised by Chinese-developed DeepSeek. ASML shares in Amsterdam surged 11% early Wednesday.

In Asia, most markets were closed for holidays.

Japan's Nikkei 225 index recovered from Tuesday's losses, gaining 1% to 39,414.78.

Australia’s S&P/ASX 200 rose 0.6% to 8,447.00 after data from the Australian Bureau of Statistics showed the Consumer Price Index increased by 0.2% in the December 2024 quarter, marking the smallest rise since the June 2020 quarter, when inflation declined during the COVID-19 outbreak.

India's Sensex was up 0.9%, while the SET in Bangkok shed 0.1%.

On Tuesday, tech stocks bounced back after tumbling Monday on doubts over whether the artificial-intelligence frenzy really needs all the dollars being poured into it.

The S&P 500 climbed 0.9% to 6,067.70, clawing back more than half of its earlier drop. The Dow Jones Industrial Average added 0.3% to 44,850.35, and the Nasdaq composite rallied 2% to 19,733.59 after sliding 3.1 % the day before.

The spotlight remained on Nvidia, whose chips are powering much of the move into AI and whose stock has become a symbol of the surrounding frenzy. It rose 8.8% after plunging nearly 17% on Monday, which was its worst drop since the 2020 COVID crash.

The New York Stock Exchange, Monday, Jan. 27, 2025, in New York. (AP Photo/Julia Demaree Nikhinson)

405, down from $1.0432.Other AI-related companies also held steadier, including chip company Broadcom, which rose 2.6%. Constellation Energy picked up 1.4% after plummeting nearly 21% on Monday. It had earlier rallied on expectations it will help supply the electricity that vast AI data centers would gobble up.
 
 Such revenues are threatened after DeepSeek, a Chinese company, said it was able to develop a large language model that can perform as well as big U.S. rivals but at a fraction of the cost. That raises questions about whether all the spending expected for AI chips and electricity will need to happen.
 
 AI-related stocks have been Wall Street’s biggest stars in recent years, soaring on expectations that big spending will only continue to grow. The gains, though, also created criticism that the stock prices had simply gone too high, too fast.
 
 It’s still uncertain how much DeepSeek’s development will upend the AI industry. While it could mean less growth in spending than expected for data centers, electricity and chips, it could also boost other areas.
 
 Some of Wall Street’s most influential companies, including Apple, Meta Platforms, Microsoft and Tesla, will release profit reports later this week.
 
 A report showing confidence among U.S. consumers wasn’t as strong as economists expected made relatively small waves in the bond market. The more anticipated event will come on Wednesday, when the Federal Reserve will announce its latest decision on interest rates.
 
 The widespread expectation is that it will leave the federal funds rate alone. If that proves true, it would be the first meeting where the Fed did not cut rates to give the economy a boost since it began doing so in September.
 
 In other dealings Wednesday, benchmark U.S. crude dropped 77 cents to $73.00 a barrel. Brent crude, the international standard, sank 78 cents to $75.71 a barrel.
 
 In currency trading, the U.S. dollar fell to 155.35 Japanese yen from 155.53 yen. The euro cost $1.0405, down from $1.0432.

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