After enduring a tumultuous Monday, dubbed the "Big Tech Liquidation Day," the U.S. stock market found its footing on Tuesday, setting the stage for upcoming earnings reports from major technology players and the Federal Reserve's interest rate decisionAs the new year rolls in, Chinese concept stocks surged collectively, spurred by the stellar performance of industry leaders like Alibaba.

By the close of trading, the S&P 500 index rose by 0.92%, reaching 6067.7 points; the NASDAQ Composite jumped 2.03% to 19733.59 points; and the Dow Jones Industrial Average gained 0.31%, ending at 44850.35 points.

An 8.93% rebound on Tuesday in NVIDIA shares, which had plummeted nearly 17% the previous day, illustrated the persistent interest among investors in this AI behemoth, despite looming fears symbolized by the "DeepSeek Dread." However, NVIDIA still needs to climb over 10% to fill the gap created by Monday's significant drop.

Interestingly, investors approached other tech stocks with greater scrutiny following Monday’s upheavalBroadcom, which experienced its own 17% decline, only managed a modest 2.59% rebound, while AMD continued to slideThis pattern indicates that investor confidence in chip manufacturers may be waning relative to enthusiasm for energy and nuclear power stocks like Oklo (+9.68%) and Vistra Energy (+9.16%).

Point72's Chairman and CEO, Steve Cohen, weighed in on AI, stating that it's likely to be a theme spanning the next 10 to 20 years, fundamentally altering lifestyles and business operationsHe acknowledged that the AI boom will encounter peaks and troughs, exacerbated by "inaccurate information" leading to market volatility.

"AI does not develop in a straight line; there will be progress followed by periods of dormancyThus, we can expect more skeptical moments like those experienced on MondayMany investors holding AI stocks know they should buy into this trend, but they still lack clarity on what exactly they are investing in and why

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This leads to a proliferation of misinformation," Cohen remarked.

For optimistic investors banking on AI stocks, Wednesday promises additional challengesExpectations are high as ASML is set to release its earnings during the European trading session, followed by Microsoft, Meta, and Tesla after the U.S. market closesWhile these tech giants are projected to maintain growth rates above other sectors, they face pressure as their growth is anticipated to hit its slowest level in nearly two yearsTherefore, they have a significant task ahead to validate their high valuations.

At the same time, the Federal Reserve's interest rate decision on Wednesday looms, but market sentiment surrounding potential rate cuts remains pessimisticAccording to options trading data, this meeting's influence on the stock market may be relatively subdued.

In terms of stock performance, Tuesday saw a majority of American tech stocks reboundApple climbed by 3.65%, Microsoft by 2.91%, Amazon by 1.16%, NVIDIA surged by 8.93%, while Alphabet (Google-A) and Meta rose by 1.82% and 2.19%, respectivelyIn contrast, losses were recorded for AMD, which fell by 0.73%, and Intel, down by 2.41%.

In market news, Novo Nordisk received FDA approval for a new use of its GLP-1 diabetes drug, Ozempic, which is now indicated for patients with chronic kidney diseaseThis decision marks a significant milestone, showcasing health benefits beyond glucose control and weight managementClinical trials indicated that Ozempic could reduce the risk of severe kidney conditions by 24% and cardiovascular-related deaths by 29%, while also slowing down the decline in kidney function.

In semiconductor news, NVIDIA is set to release its next-generation RTX 5090 and RTX 5080 graphics cards on January 30. However, the company has warned of potential shortages due to heightened demand and supply constraintsSome retailers anticipate that supplies of the RTX 5090 may be tight for up to three monthsIn response, avid gamers in the U.S. have begun camping outside stores in preparation for the first batch of graphics cards—Nvidia is actively coordinating with its partners to replenish stock daily.

HSBC, on the other hand, announced on Tuesday that it would gradually exit its mergers, acquisitions, and equity capital markets businesses in the UK, Europe, and the U.S., shifting its focus toward investment banking operations in Asia and the Middle East as part of a broader restructuring led by newly appointed CEO Noel Quinn

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