| | Good Afternoon! | Hey, everyone. It's Adam from Elite Trade Club. | Here’s what moved the market today. |
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| | | | Markets 📈 | Several U.S. indexes were hit hard by new fears surrounding China’s DeepSeek AI software, leading to big sell-offs. The Dow Jones managed to hold on, eking out a 0.65% win. | DJIA [+0.65%] S&P 500 [-1.46%] |
| Nasdaq [-3.04%] Russell 2K [-1.06%] |
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| | Market-Moving News 📈 | Artificial Intelligence | DeepSeek AI Sparks Global Tech Sell-Off, Raising Concerns Over U.S. Dominance | | Global markets saw a sharp decline on Monday, with major U.S. tech stocks, including Nvidia, suffering significant losses. The downturn was sparked by concerns over China’s DeepSeek, a startup that introduced a competitive AI model, questioning the future of America’s dominance in the field. Nvidia, a key player in the AI space, was particularly hard hit, as its stock plummeted, pulling down other tech companies, including Micron and Advanced Micro Devices. Notably, DeepSeek’s low-cost, open-source AI model, developed in just two months for a fraction of the cost of Western counterparts, has raised alarms. | DeepSeek’s entry into the AI race has rattled the industry, particularly due to the impressive performance of its models. Despite not having access to the same computing power as U.S. tech giants, DeepSeek has demonstrated that high-performance AI can be achieved with fewer resources. This has led some analysts to question whether U.S. companies are investing too much in infrastructure while underestimating the growing competition from companies like DeepSeek. | While some are worried that DeepSeek’s advancements could undermine the U.S.’s position in AI, others argue that the need for cutting-edge chips, like those from Nvidia, will continue to keep U.S. companies at the forefront. The tech world remains divided, but one thing is clear: the stakes in AI development are higher than ever. |
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| | Restaurants | Starbucks Revives Classic Coffeehouse Experience With New Changes | | Starbucks is rolling out a fresh approach starting today, aiming to reconnect with its classic coffeehouse experience. The coffee chain is reintroducing elements many customers associate with its original vibe, including condiment bars and the return of handwritten names on cups. Baristas will now engage customers by asking if they’re staying or leaving and offering ceramic mugs to those enjoying their drinks in-store. The company is also enhancing macchiatos with more intricate caramel designs, and both loyalty members and non-members will now receive free refills on hot and iced coffee. | CEO Brian Niccol’s extensive plan includes ensuring that baristas serve fresh-brewed coffee within four minutes and keeping prices stable through fiscal 2025. The menu will also see some simplifications, including the addition of vegan-friendly falafel and the removal of the upcharge for dairy-free options. | However, some of the changes, such as restricting bathroom access and limiting free water cups to paying customers, have sparked mixed reactions. Starbucks has conducted three-hour training sessions to prepare employees for the revamped customer interactions. | As Niccol works to reposition Starbucks as a premium spot for longer visits, the success of these changes remains to be seen. The company is set to report its earnings soon, with analysts predicting modest sales decline in the short term but anticipating recovery down the line. |
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| | | | Retail | Costco Switches Beverage Partnership From Pepsi to Coca-Cola | | Costco is making a notable shift in its beverage offerings, moving from Pepsi to Coca-Cola later this year. The change will take effect this summer, with Costco’s food court fountain drinks switching to Coca-Cola products like classic Coke, Sprite, Fanta, and root beer, according to CEO Ron Vachris. For over a decade, Costco’s food courts have featured Pepsi drinks, including Pepsi, Mountain Dew, and Starry, but the new partnership marks a significant departure from that. | The news of the switch first gained attention in late 2024 through social media posts, sparking mixed reactions from customers, given the strong opinions many have about the two soda brands. The transition will impact all of Costco’s 800 locations worldwide, but it's not the first time the retailer has made headlines for a menu change. In 2009, Costco replaced Hebrew National hot dogs with its own Kirkland Signature dogs. | In addition to the soda switch, Costco is also navigating ongoing debates around diversity, equity, and inclusion (DEI). The company reaffirmed its commitment to DEI programs during its recent shareholder meeting, rejecting a proposal to reduce these initiatives. Costco has also made other changes, including raising its Gold Star membership fee and cracking down on membership sharing, as well as managing several product recalls. |
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| | Top Winners and Losers 🔥 | | Aurora Mobile Ltd [JG] $14.53 (+141.68%) | Aurora Mobile shares exploded after the company integrated DeepSeek’s new AI into its platform. | Akero Therapeutics Inc [AKRO] $51.52 (+96.77%) | Akero Therapeutics stock doubled on game-changing results during its Phase 2b study for cirrhosis removal. | Dogwood Therapeutics Inc [DWTX] $17.40 (+52.63%) | Dogwood Therapeutics continues to ride excitement from its cancer research, resulting in significant gains. |
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| | | | Nebius Group N.V. [NBIS] $26.08 (-37.44%) | Nebius got caught up in the negative impact of China’s DeepSeek AI release, causing shares to fall. | Vistra Corp [VST] $137.08 (-28.28%) | Vistra was hit hard by DeepSeek’s rise, as demand for power to U.S. data centers dropped off significantly today. | Core Scientific Inc [CORZ] $11.28 (-29.44%) | Core Scientific received an outperform rating by investment bank KBW but is trending downward, likely due to insider sell-offs. |
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| | | | That's it for today! Please, write us back, and let us know what you think of the Closing Bell Roundup. We're always eager to hear feedback! | Thanks for reading. I'll see you at the next open! | Best Regards, — Adam G. Elite Trade Club |
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