Volkswacht Bodensee - Stocks firm after tech rout; dollar steady before Fed rate call

Investors were awaiting the conclusion of the Federal Reserve's interest-rate policy meeting later in the day as well as major earnings, including from Meta, Microsoft and Tesla.

"Calm has descended on financial markets after the AI upheaval, which triggered a wave of selling (this week), with investors seeing sharp falls as a buying opportunity," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

DeepSeek's unveiling of its R1 chatbot has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by American companies.

The news hammered tech firms Monday, with US chip giant and market darling Nvidia collapsing almost 17 percent and wiping almost $600 billion from its market capitalisation -- a record single-day loss for a publicly traded company.

Tuesday saw a tech rebound, with Nvidia surging 8.8 percent, as some analysts voiced doubts over whether DeepSeek's AI was developed as cheaply as it claims.

Shares in Dutch tech giant ASML, which sells cutting-edge machines to make semiconductors, soared more than 11 percent on Wednesday after it reported solid orders in the fourth quarter.

DeepSeek's arrival raised questions about whether the vast sums of cash invested in AI in the past few years may have been overdone, but observers said the industry could benefit in the long term from competition pushing down costs.

All three main Wall Street indices rose Tuesday, with the Nasdaq putting on two percent and the S&P 500 almost one percent -- both clawing back most of Monday's losses.

Tokyo followed suit Wednesday, having taken a heavy hit over the previous two days as its chip companies tanked.

There were gains also in Sydney, Wellington and Mumbai, though Bangkok dipped. Chinese indices were closed for holidays.

European stock markets mostly rose in morning deals, though Paris was dragged lower by heavy falls to shares of luxury companies.

It comes one day after LVMH, Europe's largest company by market value, said its net profit slid 17 percent last year to 12.6 billion euros ($13 billion) on falling sales.

- Fed decision -

The Fed is set to stand pat on interest rates Wednesday despite calls by President Donald Trump for the central bank to lower them.

Its post-meeting statement, and comments by boss Jerome Powell, will be pored over for clues over the outlook.

There are worries Trump's plans to slash taxes, regulations and immigration -- as well as impose tariffs on imports -- will reignite inflation and therefore keep borrowing costs higher for longer.

The prospect of rates staying elevated boosted the dollar, which is being lifted also by Trump wanting universal tariffs "much bigger" than the 2.5 percent suggested by Treasury Secretary Scott Bessent.

Elsewhere, the European Central Bank is expected to cut eurozone interest rates on Thursday.

On the eve of the decision, eurozone member Spain said its economy expanded 3.2 percent last year on buoyant exports and consumption that have made it one of the fastest-growing developed countries.

- Key figures around 0915 GMT -

London - FTSE 100: UP 0.1 percent at 8,541.10 points

Paris - CAC 40: DOWN 0.3 percent at 7,875.79

Frankfurt - DAX: UP 0.4 percent at 21,509.19

Tokyo - Nikkei 225: UP 1.0 percent at 39,414.78 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

New York - Dow: UP 0.3 percent at 44,850.35 (close)

Euro/dollar: DOWN at $1.0414 from $1.0433 on Tuesday

Pound/dollar: DOWN at $1.2434 from $1.2440

Dollar/yen: DOWN at 155.24 yen from 155.53 yen

Euro/pound: DOWN at 83.77 pence from 83.84 pence

West Texas Intermediate: DOWN 0.6 percent at $73.33 per barrel

Brent North Sea Crude: DOWN 0.6 percent at $76.02 per barrel

E.Burkhard--VB