European and Asian shares slumped on Monday as investors weighed the implications of Chinese startup DeepSeek's launch of a free open-source artificial intelligence model to rival OpenAI's ChatGPT.
Meanwhile, the dollar dipped as broad U.S. import tariffs remained on the back burner, even as U.S. President Donald Trump threatened Colombia with levies to punish the country for earlier refusing to accept flights carrying deported migrants.
China's DeepSeek rolled out a free AI assistant that it says uses lower-cost chips and less data, seemingly challenging a widespread bet in markets that AI will drive demand along a supply chain from chipmakers to data centres.
Europe's technology sector led the pan-European STOXX 600 index, opens new tab lower, down 0.7%, while the blue-chip Euro STOXX 50, opens new tab dropped 1.4% in early European trading.
The STOXX Europe 600 technology index, opens new tab fell as much as 4.6%, its biggest one-day drop since mid-October.
Futures on the tech-heavy Nasdaq Composite in the U.S. tumbled over 3.1% and S&P 500 futures sank 2%.
"China and DeepSeek say, at the very least, that they can deliver what ChatGPT can deliver today at a fraction of the cost," said George Lagarias, investment strategist at Forvis Mazars.
"It makes sense that markets question the narrative that has been underpinning the whole market ... It's a very frothy market so it doesn't really take that much for investors to take some profit."
Shares of AI-bellwether Nvidia, opens new tab, which have risen over 800% since the start of 2023, were down over 7% in pre-market trade.
Japan's Nikkei, opens new tab dropped 0.9%, reversing an initial advance. New Zealand's equity benchmark, opens new tab slipped 0.2% and Singapore's Straits Times index, opens new tab eased 0.1%.
At the same time, Hong Kong's Hang Seng, opens new tab rallied 0.7% and Chinese mainland blue chips, opens new tab dipped 0.4% after data showed a surprise contraction in manufacturing this month.
DOLLAR STRENGTH FLEETING
In currency markets, the dollar dipped, as Trump has so far refrained from implementing broad-based U.S. import tariffs, but China, Mexico and Canada face a nervy wait with Trump last week earmarking Feb. 1 for additional tariffs on the United States' top trading partners.
The dollar rose 1% against the Mexican peso on Monday and 0.1% against its Canadian counterpart .
The Colombian peso had yet to trade against the dollar, but had rallied 3.4% over the previous three sessions.
On Sunday, Trump threatened Colombia with tariffs and sanctions to punish it for refusing to accept military flights carrying deportees, but Colombia later said it would accept the military aircraft and the U.S. sanctions threat was put on hold.
The euro eased 0.1% to $1.0481. Sterling was little changed at $1.2470. The yen rose 0.8% to 154.72 per dollar.
"As a trend, Trump is taking a more realistic, less aggressive stance on tariffs," Nomura strategist Naka Matsuzawa said.
"Bottom line: Trump doesn't want big tariffs because he's worried about inflation," he said. "The dollar will be overall weaker."
The volatility across asset classes kicks off a crucial week for markets that will see the Federal Reserve and European Central Bank - among others - set monetary policy.
At the same time, many Asian bourses have extended holidays this week for the Lunar New Year. Among them, South Korea and Taiwan were already closed on Monday. Markets in mainland China are shut from Tuesday and do not reopen until Feb. 5. Australia was closed on Monday for Australia Day.
Meanwhile, crude oil prices rose slightly with Brent crude futures up 0.3% to $78.75 a barrel, while U.S. West Texas Intermediate crude gained 0.2% to $74.80 a barrel.
Gold sank 0.3% to $2,764 per ounce.
Leading cryptocurrency bitcoin slumped more than 5% to below $100,000 for the first time in a week, and was last at $99,210.
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U.S. chipmaker Nvidia has made history by becoming the first company in the world to reach a market value of 5 trillion dollars, driven by soaring demand for artificial intelligence technologies.
European shares dropped on Friday after President Donald Trump intensified tariff threats against the EU, casting doubt on trade talks and dampening investor confidence.
Japanese stocks saw the largest foreign inflow in four weeks during the week ending 14 June, driven by optimism over U.S.-China trade talks and a weaker yen supporting exporters’ earnings.
South Korea's main stock index, the Korea Composite Stock Price Index (KOSPI), rose by 35.19 points, or 1.23%, on Wednesday, closing at 2,907.04. This marks its highest closing level since 14 January, 2022, when it reached 2,921.92 points.
The death toll from heavy rains and flooding in Brazil’s Minas Gerais state has risen to 46, authorities said, with 21 people still reported missing. The storms triggered landslides and widespread flooding, displacing thousands across Juiz de Fora and Uba.
The situation in Cuba was heating up and called for restraint following a deadly incident involving a Florida-registered speedboat off the coast of the Caribbean island, the Kremlin said on Thursday (26 February).
A group of sick and injured Palestinians and their caregivers left Gaza through the Rafah border crossing on Wednesday (25 February) for medical treatment abroad, as limited evacuations continue under tight restrictions.
Syria’s economy is showing clear signs of recovery, with economic activity accelerating in recent months, the International Monetary Fund (IMF) said on Wednesday.
Venezuela’s Attorney General Tarek William Saab and Ombudsman Alfredo Ruiz tendered their resignations to the National Assembly on Wednesday. Neither official has publicly provided reasons for stepping down.
Paramount Skydance emerged as the winner in a months-long battle to acquire Warner Bros Discovery after streaming giant Netflix on Thursday refused to raise its bid for the storied Hollywood studio.
Global debt surged to a record $348.3 trillion at the end of 2025, after nearly $29 trillion was added over the year, marking the fastest annual increase since the pandemic, according to the Institute of International Finance (IIF) report released on Wednesday.
Millions of Colombian roses have arrived in the United States just in time for Valentine’s Day, keeping the country on track as the world’s second-largest flower exporter. Between 15 January and 9 February, Colombia shipped roughly 65,000 tons of fresh-cut blooms.
Russia’s car market is continuing to receive tens of thousands of foreign-brand vehicles via China despite sanctions imposed after Moscow’s full-scale invasion of Ukraine in 2022, a journalistic investigation has found.
Türkiye’s national energy company, TPAO, has struck a new cooperation deal with U.S. energy giant Chevron, signing a memorandum of understanding to explore joint oil and gas exploration and production opportunities, the Turkish Energy and Natural Resources Ministry announced on Thursday.
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