Artificial intelligence ("AI") is one of the market's biggest drivers these days... For more than a year, the promise of this technology has pushed all sorts of tech-related stocks higher.

A Big Reset for the 'AI Arms Race' By Marc Chaikin, founder, Chaikin Analytics Artificial intelligence ("AI") is one of the market's biggest drivers these days... For more than a year, the promise of this technology has pushed all sorts of tech-related stocks higher. And we've talked about the latest AI-related news across all our publications here at Chaikin Analytics. That's why I sent this special update to all of our paid subscribers on Monday. However, I also want to make sure that Chaikin PowerFeed readers who don't yet have a paid subscription to one of our products know my thoughts on this urgent development... As you surely know, many tech stocks – especially AI-focused ones – tumbled on Monday. For example, Nvidia (NVDA) collapsed by about 17%. That's a huge move. In short, a surprise development out of China is causing a lot of folks to panic... Recommended Links: Here's What You Missed Yesterday After this week's crash in the AI sector, now is NOT the time to be guessing or taking wild risks with your money. Instead, you need to be smart... calculated... and make sure your ENTIRE portfolio is set up for success. Is yours? Or are you dangerously exposed to a big down move? If you're worried, watch this replay of last night's major broadcast. Critical Post-Election Event Headed Straight for U.S. Stocks 50-year Wall Street legend Marc Chaikin believes a critical post-election surprise is heading straight for U.S. stocks. While most Americans were distracted by the election, geopolitical turmoil, and recent market volatility... Marc watched a powerful market signal (with 93% historical accuracy) flash quietly. He explains what it means and what to do here. DeepSeek is a relatively new Chinese startup. It has only been operating for about a year. And on Monday, news of the company's new AI chatbot shocked the markets... The China-made chatbot is called "R1." And it's reportedly on par with its U.S. competitors – like offerings from OpenAI, Alphabet (GOOGL), and Meta Platforms (META). But importantly, R1 is different in two big ways... First, reports indicate that the product was extremely cheap to develop. R1's developers claim that it costs less than $6 million to get it up and running. Whatever the true number is, the point is clear... It's considerably less than what U.S. companies are spending on their AI tools. The spending spree from this industry is already in the hundreds of millions of dollars. Second, R1 requires significantly less computing power than OpenAI's ChatGPT and other similar models. Put simply, U.S. export restrictions spurred innovation in China. Chinese researchers collaborated. And they developed a cheaper model that runs well on older chips. This breakthrough seems to make the U.S. companies that are dumping money into their systems look silly. And the market reacted to this news in a big way. The broad market S&P 500 Index fell more than 1% on Monday. And the tech-heavy Nasdaq Composite Index plummeted by about 3%. That brings us to a critical question... What does this mean for us as investors? Let's start with the technicals... When the collapse happened on Monday, the S&P 500 spent most of the day trading around 5,990. Looking at the index's six-month chart and the current technical setup, I see that number as a key support level. Take a look... If the market closes below this level in the days ahead, we should take it very seriously. Big Tech has mostly supported the market's rally off its November 2022 bottom. That's still true today. But it also means that a market correction could be particularly painful. Remember, we're in an AI arms race... The U.S. was leading the charge. But China just fired a serious shot with R1. Now, it's time for U.S. companies to respond. And I bet they will... We have the brightest minds. And we're using the best chips. If China can make a more efficient model, so can we. In the meantime, we're at a key moment for investors... We need to see how the S&P 500 performs in the days ahead. We don't want to overreact to the news in ways that we'll regret later. So for now, my advice is simple... Make sure you follow your stops. Or if you're trading in the short term, tighten your stops. Be careful. This new Chinese AI breakthrough may be the catalyst to test the bull market's resilience. And Wall Street is figuring out what that all means. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 +0.29% 11 12 7 S&P 500 +0.86% 102 247 149 Nasdaq +1.48% 34 40 26 Small Caps +0.11% 420 1039 446 Bonds -0.07% Information Technology +2.67% 21 32 16 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bearish. Major indexes are mixed. *  *  *  * Sector Tracker Sector movement over the last 5 days Communication +3.21% Health Care +2.82% Staples +1.49% Financial +1.32% Discretionary +0.3% Materials -0.78% Real Estate -0.91% Information Technology -1.03% Industrials -1.65% Energy -4.26% Utilities -4.33% *  *  *  * Industry Focus Telecom Services 7 21 11 Over the past 6 months, the Telecom subsector (XTL) has outperformed the S&P 500 by +14.31%. However, its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #11 of 21 subsectors and has moved down 1 slot over the past week. Indicative Stocks VSAT Viasat, Inc. ASTS AST SpaceMobile, Inc ATEX Anterix Inc. *  *  *  * Top Movers Gainers RCL +12.0% CRWD +9.35% VST +9.16% IVZ +8.96% NVDA +8.93% Losers LMT -9.18% GM -8.89% HPE -6.49% JNPR -6.08% SYY -5.96% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close ADP AMP, META, MSFT, NOW, RJF, TSLA DHR, GLW, HES, LII, MSCI, NDAQ, NSC CHRW, IBM, LRCX, LVS, TER OTIS, TMUS URI, WDC, WM No earnings reporting today. Earnings Surprises BA The Boeing Company Q4 $-5.90 Missed by $-2.12 LMT Lockheed Martin Corporation Q4 $7.67 Beat by $1.05 FFIV F5, Inc. Q1 $3.84 Beat by $0.46 RTX RTX Corporation Q4 $1.54 Beat by $0.16 CB Chubb Limited Q4 $6.02 Beat by $0.57 *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at STEVENMAGALLANES520.NIMS@BLOGGER.COM. 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