The Federal Reserve will probably keep its distance from the DeepSeek saga during its policy meeting this week, but the U.S. central bank has good reason to keep very close tabs on any artificial intelligence wobble on Wall Street.

U.S. equity indexes dipped and the dollar was firm on Wednesday after the Federal Reserve held interest rates steady and gave little insight into when further reductions in borrowing costs may take place.

AI could raise productivity growth from 0.8 to 1.5 percentage points a year. That rivals the boosts we got from the transcontinental railroads, mechanization of agriculture and interstate highway system.

The S&P 500 fell 1.5% on Monday, Jan. 27, as a Chinese startup's cost-efficient and high-performing AI model sent shockwaves through the U.S. tech sector.

U.S. stocks slipped after the Federal Reserve held its main interest rate steady and broke a run of cuts that began in September

Standard Chartered's Geoffrey Kendrick explains why the impact of DeepSeek on the AI industry could be good for the Bitcoin price.

The Federal Reserve will probably keep its distance from the DeepSeek saga during its policy meeting this week, but the U.S. central bank has good reason to keep very close tabs on any artificial intelligence wobble on Wall Street.

And one key reason for the quick market bounceback was the quantum leap in generative AI represented by the launch of ChatGPT in late 2022. The AI frenzy since has catapulted the stocks of a narrow group of chipmaker and AI-related megacaps into the stratosphere, dragging wider indexes with them.

The tech-heavy Nasdaq composite closed down nearly 3% on Monday, with shares of AI-focused chipmaker Nvidia plunging 17% and shaving nearly $590 billion from the company’s market cap.

The selloff could provide traders an attractive entry opportunity in higher-beta altcoins such as Solana's SOL, which endured a double-digit pullback, one analyst said.