The FOMC is currently in a two-day meeting discussing inflation and the labor market, but they are likely also considering the impact of the AI trade on equities. Chinese AI startup DeepSeek caused a $1 trillion decline in US and European tech stocks, with Nvidia being one of the top losers. DeepSeek claims to have developed its AI model at a significantly lower cost than other companies, raising concerns about the efficiency and competitiveness of US-based AI companies. The issue of export restrictions on GPUs under the Biden administration is also a concern for US investors. Despite the market decline, Nvidia shares have rebounded. Analysts believe that leading cloud vendors and AI builders will not pause their plans due to DeepSeek's promise, as the demand for AI GPUs still exceeds supply. Nvidia executives will face tough questions during their Q4 earnings call. The FOMC decision on interest rates is expected to remain steady, and there may be discussions on the AI situation during the press conference.



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