Asian equities and U.S. stock futures declined on Monday, driven by concerns over the disruptive potential of Chinese startup DeepSeek’s new AI model, launched to rival OpenAI’s ChatGPT. This development raised questions about U.S. tech dominance and the valuation of leading tech companies. Meanwhile, Hong Kong’s Hang Seng index gained 0.9%, and mainland Chinese blue chips edged up 0.2%, despite weaker-than-expected manufacturing data.
The dollar strengthened, rising against the Chinese yuan and other major currencies, as U.S. President Donald Trump imposed sanctions on Colombia for blocking military aircraft. The Mexican peso dropped 1%, while the Canadian and New Zealand dollars also eased. Analysts expect the dollar’s strength from tariff concerns to be temporary, with Trump adopting a more cautious stance on tariffs to mitigate inflation risks.
Oil prices fell as Trump reiterated calls for OPEC to lower oil prices, with Brent crude and WTI both declining by 1.2%. Gold prices also dipped 0.6%. Markets face a pivotal week ahead with central bank meetings, including those of the Federal Reserve and European Central Bank, while several Asian markets are closed for Lunar New Year celebrations.