Key Points

• On January 27^th, Nvidia lost $589 billion from its market cap—largest single-day loss in value ever—on news that China-based DeepSeek has an AI model that rivals U.S. models but at a fraction of the cost.
• Concurrently, Q4 2024 earnings for the Nasdaq U.S. Large Cap™ Index (NQUSL™) show 77% of companies beating EPS estimates approximately halfway through the current reporting period, and a blended EPS growth rate of nearly 15%. Nasdaq-100® companies have been outperforming, with 88% beating estimates and blended EPS growth of ~20%.
• Performance across Nasdaq’s suite of indexes finished mostly positive for January. Approximately six out of every seven indexes tracked in our report experienced gains, with the average index up 3.4%.

Executive Summary

Financial markets were blindsided by the news that Chinese artificial intelligence (AI) start-up DeepSeek has developed an AI model which rivals the most prominent U.S. models. More notably for corporate AI capital spending outlooks, DeepSeek claimed – somewhat misleadingly – that it cost less than $6 million to train its model using less sophisticated semiconductors and infrastructure. While this led to a substantial sell-off in Nvidia (NVDA) on January 27^th, the skepticism around DeepSeek’s purported cost of its model and questions around the actual infrastructure led to NVDA recovering $260 billion the next day—the second largest daily market cap gain in history. A debate ensued around the extent to which DeepSeek’s undeniable efficiency gains will lead to faster declines in the cost of AI deployments, thereby quicker adoption and an offsetting increase in demand for AI compute. Indeed, NVDA itself has shown the ability to outpace Moore’s law in recent years with a ~1,000-fold increase in the compute capacity of its leading-edge chips since 2016. Outside of NVDA, several other megacaps tied to the AI growth theme finished the week higher – including Apple (AAPL), Meta Platforms (META), Amazon (AMZN), and Alphabet (GOOG) – as the DeepSeek news continued to be digested and earnings reports began rolling in. 

 

Source: Nasdaq Global Indexes, Nvidia Q4 2024 investor presentation. TFLOP = one trillion GPU calculations per second. 

On the macro front, the markets continue to digest the implications of the potential changes in fiscal policies (e.g. tariffs, tax cuts) and concerns around a stickier underlying inflationary backdrop as the second administration of President Trump officially began. The Federal Reserve left rates unchanged at its most recent meeting on January 29^th at 4.5%, as expected, after cutting rates at the three prior meetings. The Fed now sees the economic outlook as "uncertain," given the potential for significant aforementioned policy changes. For now, though, the Fed judges the economic growth and the labor market as "solid," while inflation is still "somewhat elevated." Treasury 10-year yields are higher by approximately 90 basis points since the Fed first cut rates in mid-September—a dynamic not seen at this point following the commencement of rate cutting cycles since at least the one which began in June 1989. However, 10-year yields faded during most of January after approaching 4.80%, likely driven by oscillating views around the scope for tariff policies. After an initial scare around punitive tariffs announced on Mexico/Canada at the end of the month, the markets appear to once again be discounting the likelihood of any new levies that would severely disrupt global trade flows and weaken the macroeconomic outlook. On the other hand, uncertainty will likely continue in the short to medium term, driving volatility higher across most risk assets.

Nasdaq Indexes January 2025 Performance Recap

Among the 122 indexes tracked in this report, 10 finished January in negative territory, while 112 ended with positive returns. The best-performing index was the Nasdaq CTA Global Digital Health™ (BEWELL™), delivering a return of 12.8%. The average return across all 122 indexes for the month was 3.7%.

Nasdaq Featured Indexes

12 of the 13 Nasdaq Featured Indexes registered positive returns in January, a reversal from December when only four indexes finished in positive territory. The Nasdaq-100 Dorsey Wright Momentum™ (NDXDWA™) was the top performer, registering positive returns of 9.1% while the Nasdaq-100 Mega™ (NDXMEGA™) was the bottom performer, recording a decline of 0.5%. Despite the volatility in the final week, the Nasdaq-100® registered returns of 2.2%, easily outpacing its gain of 0.4% in December. The Nasdaq-100 Equal-Weighted™ (NDXE™) was up 4.8% and outperformed for a change, to a large extent due to those steep declines in Nvidia; a similar dynamic enabled the Nasdaq-100 ex Top 30™ (NDX70™) to outperform the Nasdaq-100 Top 30™ (NDX30™). Overall, this group of indexes was up an average of 3.4%.

Nasdaq Global Indexes

All indexes in the Nasdaq Global Indexes suite recorded positive returns this month, averaging a gain of 3.4%. Nasdaq Europe™ (NQEU™) was the best performer, registering returns of 6.6%, as European markets shrugged off tariff fears stirred by recent announcements from President Trump. Additionally, investors reacted positively to the European Central Bank’s fifth consecutive interest rate cut. The group's laggard was Nasdaq Emerging Markets™ (NQEM™), registering returns of 0.9%. This index came under pressure as tariff uncertainty and strong US job figures dented investor confidence in EM outperformance potential.

Nasdaq Sector-Specific Indexes

Within Nasdaq’s sector-specific indexes, the PHLX Gold/Silver Sector™ (XAU™) was the top performer, registering positive returns of 12.3%, due to safe-haven demand for the precious metal amid tariff threats and continued concerns around inflationary risks tied to fiscal policy. Banks also performed strongly, with the KBW Nasdaq Bank™ (BKX™) up 8.7% and the KBW Regional Banking™ (KRX™) up 5.4%

Nasdaq Thematic Indexes 

Overall performance across the Nasdaq Thematic Tech lineup was broadly positive in January with all 25 indexes in the suite recording gains, averaging 5.0%. The Nasdaq CTA Global Digital Health™ (BEWELL™) was the top performer, registering gains of 12.8%. Semiconductors came under pressure with the Nasdaq US Smart Semiconductor™ (NQSSSE™) the worst performer, registering returns of 0.6% and the PHLX Semiconductor™ (SOX™) the second worst performer, registering returns of 0.7%. On top of the DeepSeek news, concerns about new export controls targeting artificial intelligence chips weighed on investor sentiment as they factored in the pressures on the global semiconductor supply chain.

All but three indexes in the Nasdaq Thematic Renewables and Energy Transition Materials suite posted gains this month, with an average return of 1.7%. This contrasts with the previous month, when the suite of indexes registered average returns of -8.4%. The Nasdaq Sprott Junior Uranium Miners™ (NSURNJ™) was the top performer, registering a gain of 6.0%, due to continued tailwinds from the demand for nuclear power by big technology companies. The Nasdaq Sprott Nickel Miners™ (NSNIKL™) was the worst performer, registering a loss of 7.1%.

The Nasdaq Crypto Index suite generated an average gain of 6.3%. The Nasdaq Crypto™ (NCIS™) was the top performer, generating returns of 9.8%, while the Nasdaq Ethereum™ (NQETHS™) was the underperformer, seeing a loss of 0.6%.

Nasdaq Quantitative Indexes

Across the index suites comprising Nasdaq’s quantitative offerings, performance was broadly positive with 49 of 52 indexes seeing gains in January. The Credit Suisse Nasdaq Silver FLOWS106 TR™ (QSLVOTR™) was the top performer, registering positive returns of 7.8%. All but one of the indexes in the Nasdaq Options & Other Quantitative suite saw gains, and all 11 Nasdaq Multifactor indexes were positive this month.

The Dorsey Wright Consumer Cyclicals Tech Leaders™ (DWCC™) was the top performer in the Nasdaq Dorsey Wright suite, registering positive returns of 6.7%, followed closely by the Dorsey Wright Consumer Staples Tech Leaders™ (DWCS™) and Dorsey Wright Developed Markets Tech Leaders™ (DWADM™) which registered positive returns of 6.4% each. The Dorsey Wright Emerging Markets Tech Leaders™ (DWAEM™) was the worst performer, with a loss of 3.1%.

All 15 indexes in the Nasdaq Dividend and Income suite posted gains this month, with an average gain of 3.3%. This was in stark reversal to the previous month when all indexes posted losses. The Nasdaq US Rising Dividend Achievers™ (NQDVRIS™) was the top performer, generating returns of 5.8%, followed by the Nasdaq International BuyBack Achievers™ (DRBXUS™), up 5.5%. 

Disclaimer:

_{Nasdaq® is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.}

_{© 2025. Nasdaq, Inc. All Rights Reserved.}