American AI stocks got sucker punched after China's DeepSeek app reportedly showed advancements against rivals sending investors into sell mode, shaving 3% off the Nasdaq.

The Nasdaq & S&P 500 fell after Chinese startup DeepSeek shows AI can be built cheaply, sparking fears AI spending will stall. The blue-chip Dow rose.

The S&P 500 and the Nasdaq fell sharply on Monday, led by Nvidia and other chipmakers as popularity of a low-cost Chinese artificial intelligence model raised investor worries about the outlooks for current AI leaders in the United States.