The rout continues with S&P 500 futures down over 2% now

Tech shares are the main drag with Nvidia itself down some 11% in pre-market trading. A lot of attention is put on DeepSeek and Adam had the early scoop last week already here: China’s DeepSeek may have just upended the economics of AI

That’s leading to a broader fallout among chipmakers now as investors pick up on the development since the weekend. S&P 500 futures are now down 2.4% at the lows for the day with Nasdaq futures down 4.2%. It’s a bloodbath out there. Meanwhile, Dow futures are down 0.9% currently.

The flight to safety is leading 10-year Treasury yields down over 9 bps to 4.524% and USD/JPY down over 1% now to test 154.00 on the break of the 155.00 level earlier. The greenback was the lead gainer in Asia trading but has surrendered a chunk of its gains during European morning trade.

EUR/USD has turned things around from 1.0460 to 1.0500 now while GBP/USD is up from 1.2430 to 1.2500 on the session. USD/CHF has also dropped from 0.9060 to 0.8995 now as the equities selloff is also lighting a bid in the franc.

Going back to US stocks, the S&P 500 may have touched a record high last week but looks poised to erase all of the gains then at the open today. On the chart, it will still look like a blip but perhaps this could signal the start of a more meaningful retracement/correction after all the frothiness in 2024.

This article was written by Justin Low at www.forexlive.com.