The release of a less capital-intensive artificial intelligence model from China’s DeepSeek sent a chill through the U.S. stock market Monday, initiating a massive selloff underscoring the fragile backdrop behind the record market.

Nasdaq posted its biggest one-day percentage drop since Dec. 18 on Monday as a low-cost Chinese artificial intelligence model prompted a steep selloff in U.S. chipmakers.

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.

U.S. stocks recovered some ground on Tuesday after getting hammered by fears over China's DeepSeek AI model built on a shoestring budget.