Crypto News: What you need to now about the DeepSeek selloff

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Consider it a warning.

On Monday, tech stocks tanked fast and hard on fears about Chinese AI startup DeepSeek. Nvidia shares plunged 17%, erasing $589 billion from the company's market capitalization for the biggest drop in US stock-market history. The Nasdaq 100 lost almost $1 trillion in value. Energy firms and crypto fell, too.

The selloff was a potent reminder of how concentrated markets have become around a small cadre of tech stocks and how important it is to be diversified. In fact, the leading stocks of the S&P 500 haven't been as concentrated as they are now since the run-up to the dot-com bubble at the end of the 1990s.

The one-day market plunge happened largely because investors clocked a challenge to a narrative that has propelled markets to record highs over the past two years. That tale is made up of several assumptions: AI will be widely adopted and drive a new level of productivity in the economy; tech companies that spend billions of dollars on expensive AI technology will be rewarded in the future; the US has a significant advantage over other countries in this industry.

DeepSeek forced investors to rethink those ideas. Its new AI assistant, similar to ChatGPT or Claude, reached the top of Apple's app store last weekend. The company says its model was developed at a fraction of the cost and computing power of existing technology. That forced a reexamination of American tech firms' spending plans on AI. President Trump called it a "wake-up call."

Markets have recovered since the rout Monday. Nvidia regained ground. Some analysts noted that the selloff was more of a blip than a sign of a bear market coming, given the positive outlook for the economy. Others indicated we could be reaching a turning point where cheaper AI technology starts benefiting the broader economy as more firms are able to afford it.

If the recent volatility gives you jitters, or if you remain concerned that the bull run in technology stocks is running out of steam, let me give you something else: a guide to investing that Bloomberg Wealth just put out with ideas branching well beyond tech and AI.

In it, four investment experts offer suggestions that delve into the less glamorous (but potentially more lucrative) pockets of US stock markets, such as healthcare and consumer staples. There are also ideas on how to splash out on a dream alpine vacation and a trip through a very well-stocked wine cellar. I'm listening. — Charlie Wells

Market Moves

Starbucks shares are up. The company reported better-than-expected quarterly results this week, luring back lapsed customers with coffee-focused ads and by removing extra charges for nondairy milk. Chief Executive Officer Brian Niccol, who joined in September, is working to stem a customer exodus sparked by boycotts, price increases and slow service. Starbucks shares rose as much as 6.8% in Wednesday trading in New York.

Bitcoin rose. The cryptocurrency extended its biggest jump in more than a week following the Federal Reserve's latest monetary policy meeting and comments from Chair Jerome Powell that touched briefly upon crypto regulation. Fed officials on Wednesday paused monetary easing, and Powell in his customary briefing signaled that the central bank will need to see more progress on inflation before considering any further reduction in interest rates.

Wealth Gains

The biggest gainers and losers on the Bloomberg Billionaires Index over the past week:

Mark Zuckerberg was the biggest gainer in dollar terms. The co-founder and chief executive of Meta Platforms clocked an $18.3 billion gain, bringing his net worth to $238.8 billion. The majority of Zuckerberg's fortune is derived from a stake in Meta. Shares in the company gained after the executive exuded confidence in his firm's artificial intelligence strategy.

Larry Ellison was the biggest loser in dollar terms. The founder and largest shareholder of Oracle lost $20.1 billion, bringing his net worth to $208.8 billion. The company plunged during Monday's tech selloff and has slowly been regaining ground.

Real Estate Watch

JPMorgan's Former 'Punch Card' Building Unveils $10,000 Rentals

25 Water St., before and after renovation. Source: José A. Alvarado Jr.

The nation's biggest office-to-residential conversion is hitting the market with 1,300 apartments carved from a million-square-foot brick fortress originally built to house computers — and not much else.

After a two-year transformation, the 55-year-old building at 25 Water St. in Manhattan's financial district — used for years to process checks, money transfers and other paperwork for Manufacturers Hanover Trust and then later, for back-office staff at its successor bank, JPMorgan Chase & Co. — is now unrecognizable. Rents will range from more than $3,000-a-month for a studio to about $10,000 for three-bedroom apartments, not including an undisclosed amenity fee. Monthly rent for the higher-floor apartments, which will be ready to rent in a few months, will near $12,000.

LA's Backyard-Home Boom Offers Wildfire-Hit Residents New Option

Photographer: Jessica Pons/Bloomberg

Alongside patios, pools and palm trees, Los Angeles backyards increasingly feature another element: small cottages for family members, renters or home offices. The petite homes, meant to help ease the city's housing crisis, are now becoming a key resource for residents displaced by the area's devastating wildfires.

Residences known as accessory-dwelling units, or ADUs, have boomed in recent years, making up more than a third of the homes completed in Los Angeles County in 2023, according to state data. Many are now housing evacuees and are likely to be an important part of the building effort after the Palisades and Eaton fires, as California Governor Gavin Newsom seeks to fast-track construction in affected areas.

Know Anyone Who…?

This week, we're looking to speak with people who feel stuck in their current jobs and are looking for new ones in 2025.

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