This week's trading activity highlighted AI's growing influence on global markets. In China, startup DeepSeek triggered a massive tech stock sell-off by releasing an AI model rivaling U.S. leaders at lower costs. This caused Nvidia's valuation to plummet nearly $600 billion as investors feared reduced demand for American AI chips. The development underscored China's rapid AI progress, with DeepSeek's app topping download charts despite U.S. sanctions.

U.S. markets responded with mixed signals. Duolingo continued its AI-powered surge, adding 46.6 million daily users through gamified language learning. Its stock rose 53% in 2025 despite trade war uncertainties, showing resilience in consumer AI applications. Nvidia partially recovered after reporting 69% revenue growth in Q1 2026, though concerns persist about long-term competition.

The White House announced a $500 billion public-private partnership with OpenAI, SoftBank, and Oracle to build domestic AI infrastructure. This "AI Marshall Plan" aims to counter Chinese tech dominance but raised questions about market fairness and government overreach. Concurrently, regulators debated export controls on AI chips, creating volatility for semiconductor stocks.

Quantum computing emerged as a bright spot, with firms like Quantum Computing Inc. seeing surge in retail investments. Analysts noted growing interest in next-gen AI infrastructure despite the sector's technical complexity. Meanwhile, value investors targeted undervalued AI stocks like Yiren Digital, betting on P/E ratio corrections.

Globally, markets reacted to diverging AI strategies. European regulators proposed AI transparency rules, while Asian markets saw inflows into Chinese AI ETFs. The IMF warned of "AI trade wars" potentially disrupting supply chains, particularly in semiconductor manufacturing.

As June progresses, traders eye Fed rate decisions and AI earnings reports. Deutsche Bank's upgraded S&P 500 forecast to 6,550 reflects confidence in AI-driven productivity gains, but risks remain from geopolitical tensions and regulatory uncertainty. The week ended with record options volume on AI stocks, signaling continued volatility ahead.