The Chinese AI service has Wall Street worried that it will be cheaper than expected to develop models. But as chip stocks sink, some analysts see a silver lining.

Chip stocks in the U.S. and Europe rose on Wednesday for a second straight day, recovering from a punishing selloff triggered by China's low-cost DeepSeek artificial intelligence tool at the start of the week.

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

U.S. equity indexes dipped and Treasury yields pushed higher on Wednesday after the Federal Reserve held interest rates steady and gave little insight into when further reductions in borrowing costs may take place.