January 2025 Market Recap & Key Drivers

Market Recap & Key Drivers

January 2025 Market Recap & Key Drivers In the past month, stock prices have stabilized, mainly due to rising interest rates, which prompted many investors to reduce their risks. Investor sentiment fell sharply, marking the biggest drop since Q4 2023. However, the December Consumer Price Index (CPI) report indicated a slowdown in inflation, sparking a broad rally.

The release of the DeepSea R1 AI model caused significant disruption in the AI sector. Its innovative design and much lower costs led to a sharp decline in AI-related stocks, with Nvidia experiencing its ninth-largest single-day drop since going public. Historically, similar sudden drops in Nvidia's stock have often signaled a market bottom, a trend we noted earlier this week. As a result, investors took advantage of the lower prices, leading to a stabilization in the market.