The introduction of the Chinese AI company DeepSeek and its open-source models has disrupted the US stock market, leading to a sell-off that saw losses in the hundreds of billions of dollars. Major tech companies like Nvidia, Tesla, and Alphabet were notably affected. Hedge funds had been gradually reducing their investments in the Magnificent 7 stocks since mid-2023 as a precaution. A Goldman Sachs report highlighted that these stocks now represent only about 15.5% of total US net exposure, down from 21% in June 2023, indicating a strategic retreat by big investors ahead of the market turbulence.
DeepSeek's launch spurred a sell-off in the US stock market, causing losses exceeding hundreds of billions among major tech stocks like Nvidia and Tesla.
Hedge funds are cutting exposure to the Magnificent 7 stocks, reaching their lowest levels since mid-2023, reflecting a strategic withdrawal amid market instability.
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