This week, US stocks are struggling to breathe under the impact of AI and tariff attacks.

On Monday, DeepSeek shook Silicon Valley, leading US AI stocks to collectively plunge, with$NVIDIA (NVDA.US)$the core AI symbols losing over 80 billion dollars in market cap on that day, raising concerns that the USA's absolute advantage in the AI field is weakening.

However, as major US Technology giants successively announced their latest earnings reports, technology stocks recovered some of their losses.

Specifically, the latest earnings reports from the four major technology giants were 'mixed': $Meta Platforms (META.US)$ With the unexpected growth of the advertising business boosting market confidence,$Tesla (TSLA.US)$stabilizing its position through cost control, $Apple (AAPL.US)$ service business revenue hits a new high, but only$Microsoft (MSFT.US)$the slowdown in cloud business growth dragged down stock prices.

Ned Davis Research strategist Ed Clissold pointed out that as of Thursday, 333 stocks in the S&P 500 constituents are still rising, showing that the market resilience remains.

Meanwhile, the economic data released this week also generally met expectations. Tom Essaye, president of Sevens Report, described the recent economic performance as "just right": the GDP growth rate for the fourth quarter was 2.9%, showing no signs of overheating, while the core PCE price index rose by 0.2% month-on-month in December, confirming that inflation is controllable. Combined with the 0.7% growth in consumer spending month-on-month, it creates a perfect picture of an "economic soft landing."

Some analysts pointed out that the Federal Reserve's statement to maintain interest rates during Thursday's monetary policy meeting has reassured the market, signaling a "policy vacuum period."

Boosted by various factors, the market steadily recovered, almost regaining previous losses, but the situation took a sharp turn downward on Friday.

According to a report by CCTV News on January 31, U.S. White House Press Secretary Karine Levitt stated at a briefing that a 25% tariff would be imposed on goods from Mexico and Canada starting February 1. After the news broke, U.S. stocks shifted from gains to losses, causing the S&P 500 to drop 0.7% in a single day, with the weekly decline widening to 1%.

Goldman Sachs economists, including Jenny Grimberg, noted that the current U.S. stock market is underpricing the risks of retaliatory or universal tariffs, so if such tariffs are implemented, the market is likely to see a correction.

James Reilly, a senior market economist at Capital Economics, warned that: "This is just the beginning of uncertainty in trade policy."

Gilles Guibout, head of European equities at Axa IM, stated:

"The market has priced in a lot regarding U.S. tariffs, but Trump could always bring unexpected risks."

Daniel Skelly, head of the Market Research and Strategy team at Morgan Stanley Wealth Management, analyzed:

"We have already mentioned the potential volatility around tariffs, and today we have seen its performance in the market. Just like the AI news on Monday, how the market will digest this development from a long-term perspective remains to be seen."

In the Technology Stocks sector, NVIDIA experienced its largest weekly percentage loss since September 2022, with a market cap loss exceeding $450 billion, marking the largest weekly market cap evaporation in U.S. stock market history.

Data from Truist Advisory Services shows that hedge funds' net long positions in Technology Stocks have fallen to their lowest level since 2022. The market is reevaluating whether Technology Stocks can continue to lead the bull market under the dual pressures of technological equalization and geopolitical tensions.

Matt Maley from Miller Tabak+Co. analyzed:

"We believe that while the AI phenomenon may/should continue to be a positive factor, it is very likely not to be as strong as the market has estimated over the past six months, and the stock market will quickly adapt to this view."

Editor/rice