No signs of trend reversal for stocks, but investors should tread with care

WRITING notes in space was a challenge before the advent of powerful laptops. The Americans reputedly spent millions on designing gravity-defying pens. The Russians simply gave their astronauts a pencil, or so the story goes.

While this analogy is not an exact match, this is broadly what happened when the Chinese artificial intelligence tool DeepSeek burst on the scene. It appears to be a simple solution to a complex problem.

Whether its capabilities are true or false does not matter. DeepSeek is an achievement that exposed the fragility of the US markets and temporarily stripped the clothes from the Magnificent Seven stocks. The open-source DeepSeek software has shaken the foundations of this market exceptionalism, but is it enough to bring the house down?