The Biggest Company in the S&P 500 Becomes the Third-Biggest in Wake Up Call

If you looked just at the week-over-week change in the S&P 500 (Index: SPX), you might think that not much newsworthy happened to influence stock prices during the final trading week of January 2025. The index fell just one percent from its previous week’s close, ending at 6,040.53 on Friday, 31 January 2025.

But the same is not true for Nvidia (NASDAQ: , which lost 17.0% of its total market capitalization on Monday, 27 January 2025 after news that China’s DeepSeek artificial intelligence application was up and running became public over the weekend. That news shook AI stocks like Nvidia because the new AI system was reported to not require the company’s high-end computer chips to be a viable competitor to established AI systems.

As that happened, NVDA stock went from accounting for 6.96% of the S&P 500′s total market capitalization to 5.94%. That’s the difference between being the biggest publicly-traded company in the index to the third-biggest.

According to S&P’s Howard Silverblatt, Nvidia’s stock had a 171% gain in 2024, contributing a little over one-fifth to the S&P 500′s overall return of 25% for the year by itself. 2025 is shaping up to be a very different year for the AI stocks that powered the index in 2024.

Regardless, the latest update of the alternative futures chart finds the S&P 500′s trajectory remained consistent with investors continuing to focus on the distant future quarter of 2025-Q4 through the past week, where the likely timing of a second rate cut by the Fed during 2025 is drawing their forward-looking attention.

Here are the daily highlights of the market moving headlines investors absorbed during the trading week.

Monday, 27 January 2025

• Signs and portents for the U.S. economy:

• Renewed inflation worries help drive oil price rally
• Oil hits 2-week low as China’s DeepSeek AI spurs demand fears
• US new home sales exceed expectations; rising supply curbs house price growth

Bigger trouble, stimulus developing in China:

• China Jan manufacturing activity unexpectedly contracts, hits five-month low
• China’s industrial profits fall 3.3% in 2024, third year in the red

BOJ minions thinking about becoming more vague about their policies:

• BOJ may revert to fuzzy communication after Fed-style clarity on rates

ECB minions worried Eurozone governments will start telling them how to set monetary policies:

• ECB’s Lagarde warns over cost of losing independence

Nasdaq dropped 3%, S&P fell, while Dow advanced as China’s DeepSeek app rattles market

• DeepSeek’s ‘Sputnik moment’ prompts investors to sell big AI players

• China’s DeepSeek prompts global selloff in AI-linked stocks
• What is DeepSeek?

Tuesday, 28 January 2025

• Signs and portents for the U.S. economy:

• Oil prices rebound from multi-week lows as investors brace for Trump tariffs
• US house price growth moderates in November
• US labor union membership slips in 2024 to record low

BOJ mininons thinking about raising Japan’s interest rates again in six months:

• BOJ to raise rates again by July, eventually eye hike to 1.5%, says ex-policymaker
• Japan’s corporate service inflation hits 2.9%, signals broadening price pressure

Bigger trouble developing in the Eurozone:

• Germany in deep economic crisis, BDI industrial lobby group says
• Germany must address structural weaknesses to keep AAA rating, Scope says

Nasdaq ends up 2%, S&P gains as tech stocks work to recover from DeepSeek-sparked selloff

• How does Nvidia’s $593B market cap wipeout compare to Mag 7 peers?

Wednesday, 29 January 2025

• Signs and portents for the U.S. economy:

• Oil prices slip as US inventories rise; tariff concerns in focus
• Record US goods trade deficit seen cutting into fourth-quarter GDP growth
• Companies eye US expansion to lessen fallout from potential tariffs
• FACTBOX: All of Donald Trump’s tariff threats

Fed minions leave rates unchanged, worry about persistent Bidenflation:

• Fed leaves rates unchanged, sees no hurry to restart cuts
• Fed stands pat, leans hawkish with omission of inflation-progress reference

• Fed chief Powell does not comment on Trump’s ‘demand’ to decrease interest rates

Fed entering tough period for measuring money market liquidity

Bank lending prospects among key inputs for policymakers at Fed meeting

Bigger trouble developing in Canada:

• Bank of Canada cuts growth forecasts for 2025 and 2026
• Bank of Canada cuts rates, says tariff war could be very damaging

BOJ minions thinking about how they lost their credibility for never-ending stimulus:

• Kuroda’s ‘bazooka’ was losing fans within BOJ by time it was expanded, minutes show
• BOJ board signalled intent to keep hiking rates, December meeting minutes show
• BOJ will keep raising rates if economy on track, deputy governor Himino says

Bigger trouble developing in the European Union:

• Swedish central bank cuts policy rate eying weak economy

Nasdaq, S&P, Dow end off session lows as Powell strikes patient tone on interest rates

• Nasdaq leads Wall St higher, tech shares recover from Monday’s sell-off

Thursday, 30 January 2025

• Signs and portents for the U.S. economy:

• Oil wavers as markets await clarity on Trump tariffs on Canada, Mexico
• Weak business spending restrains US economy; domestic demand robust
• Companies race to ship goods to the US ahead of potential tariffs

Other central banks dialing up rate cuts:

• Bank of England readies rate cut and could hint at more to come
• ECB rate decision: European central bank expected to cut again

BOJ minions claim they’ll keep hiking interest rates in Japan, although they also claim they’ll maintain monetary support:

• BOJ will keep raising rates if economy on track, deputy governor Himino says
• BOJ must maintain monetary support, says governor Ueda
• Core inflation in Japan’s capital hits 1-year high, keeps BOJ rate-hike bets alive

ECB minions cut Eurozone interest rates, think weak Eurozone economy will require more rate cuts:

• ECB cuts rates and governors expect more amid weak growth
• ECB rate decision: European Central Bank cuts again, Lagarde says tariffs will have ‘global negative impact’

Stocks end higher in whipsaw session marked by renewed Trump tariff pledge, tech earnings

• Stocks muted as ‘Magnificent Seven’ earnings land; gold nears record
• Gold prices hit all-time highs as the U.S. dollar and bond yields sink: SA Charts

Friday, 31 January 2025

• Signs and portents for the U.S. economy:

• US inflation rises in December; consumer spending accelerates
• Trump is getting the lower interest rates he demanded from everyone but the Fed
• Oil set for weekly decline as Trump tariff threat looms large
• Trump Slaps 25% Tariffs On Canada & Mexico, 10% On China

Fed minions say persistent Bidenflation will force them to go slow on rate cuts:

• Traders bet Fed’s next rate cut will wait until June
• Bowman: Inflation risks to the upside, further rate cuts should be gradual, cautious
• Fed’s Goolsbee comforted by latest inflation data, worried about tariffs

Bigger trouble developing in China:

• Exclusive: Chinese workers in BYD Brazil factory signed contracts with abusive clauses, investigators say

S&P, Dow, Nasdaq end lower as U.S. preps tariffs on Canada, Mexico, China; indexes rise in January

• S&P 500, Dow ease as White House says Trump to implement tariffs

The CME Group’s FedWatch Tool continues to anticipate the Fed will next act to cut interest rates by a quarter point on 18 June (2025-Q2). However, the projected timing of a second rate cut in 2025 has moved up from 10 December to 29 October (2025-Q4).

The Atlanta Fed’s GDPNow tool‘s final projection of real GDP growth rate for the now-past quarter of 2024-Q4 was a +3.0% annualized growth estimate, which overshot the BEA’s official first estimate of GDP in 2024-Q4 of 2.3% annualized growth. The GDPNow tool’s first projection of what real GDP growth will be in the first quarter of 2025 is 2.9%.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of the stock prices of AI companies like NVDA being rattled by news of China’s DeepSeek”.