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Chipmakers in Asia and Europe rebounded on Wednesday after strong corporate earnings from Dutch group ASML added to the previous day’s rally in industry leader Nvidia.

The recovery came after US chipmaker Nvidia closed up nearly 9 per cent on Tuesday, recouping some of the heavy losses that wiped close to $600bn off its market capitalisation at the start of the week, when investors fretted over the threat from China’s DeepSeek to the US supremacy in artificial intelligence.

The emergence of DeepSeek, which promises to develop AI tools at a fraction of the cost of US rivals, has been called a contemporary “Sputnik moment”.

The Stoxx Europe 600 benchmark was up 0.5 per cent, led by ASML. The chip equipment maker announced earnings that beat analysts’ expectations, sending its shares 10 per cent higher in Amsterdam.

ASM, another chip stock, rose 7 per cent, while the Stoxx Europe 600 Technology index was up 4.3 per cent, more than erasing Monday’s rout.

“What happened on Monday was an extreme overreaction that was amplified by extreme positioning,” said Elyas Galou, global investment strategist at Bank of America, pointing to crowded positions in global tech stocks heading into US President Donald Trump’s inauguration and ahead of this week’s earnings from tech bellwethers including Meta and Microsoft.

“We saw a lot of buying yesterday, including from retail investors, which is supporting the market today,” he added.

Nvidia shares were flat in pre-market trading on Wednesday. Futures markets pointed to a further rebound in the US, with contracts tracking the Nasdaq up 0.3 per cent and those tracking the S&P 500 flat.

Japan’s tech-heavy Nikkei 225 closed up 1 per cent after a rebound in semiconductor stocks and AI investor SoftBank.

“Markets have taken a calmer look at developments in China with AI and perhaps it is a reflection that Monday’s moves were an overreaction,” said Mitul Kotecha, head of emerging markets macro and foreign exchange strategy at Barclays.

Asian market analysts at Goldman Sachs wrote in a note on Tuesday night that “oversold high-quality stocks could also provide some investment opportunities”, adding “we think strong companies will get even stronger”.

In Tokyo, Nvidia supplier Advantest closed up 4.4 per cent while semiconductor company Tokyo Electron was up 2.3 per cent. SoftBank ended the day with a 2.4 per cent rise.

Markets in the rest of Asia were also buoyant on Wednesday. India’s Nifty 50 was up almost 1 per cent in afternoon trading while Australia’s ASX 200 closed up 0.6 per cent. China, South Korea and Taiwan are closed for lunar new year holidays.

However, analysts warned that the recovery had not yet fully undone the panicked falls on Monday as investors digested the implications of the heavy AI investment by US tech in light of DeepSeek’s achievements.

“There’s not been a rebound like ‘oh, it was nothing’. It is just a reflection that Monday’s move was a tad overdone,” said Barclays’ Kotecha.

American students’ reading skills have continued to decline since the COVID-19 pandemic, while their math skills have barely improved, according to a report from the Department of Education released Tuesday. 

Often called the “Nation’s Report Card,” the 2024 National Assessment of Educational Progress (NAEP) is given every two years and considered one of the best indicators of the academic progress of the U.S. school system. The most recent exam was administered in early 2024 in every state, testing fourth- and eighth-grade students on their math and reading skills.

The results showed that, compared to 2022, the average math score for eighth grade students was virtually unchanged, while reading scores fell 2 points at both grade levels. One-third of eighth grade students scored below “basic” in reading, more than ever in the history of the assessment.

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“Today’s NAEP results reveal a heartbreaking reality for American students and confirm our worst fears: not only did most students not recover from pandemic-related learning loss, but those students who were the most behind and needed the most support have fallen even further behind,” the DOE said in a statement. “Despite the billions of dollars that the federal government invests in K-12 education annually, and the approximately $190 billion in federal pandemic funds, our education system continues to fail students across the nation.”

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Students are considered below basic if they are missing fundamental skills. For example, eighth grade students who scored below basic in reading were typically unable to make a simple inference about a character’s motivation after reading a short story, and some were unable to identify that the word “industrious” means “to be hard-working.”

“The news is not good,” said Peggy Carr, commissioner of the National Center for Education Statistics, which oversees the assessment. “We are not seeing the progress we need to regain the ground our students lost during the pandemic.”

(Education Images/Universal Images Group via Getty Images)

Among the few bright spots was an improvement in fourth grade math, where the average score ticked up 2 points on a scale of 500. But it’s still 3 points lower than the 2019 pre-pandemic average, 

Despite the abysmal results, some states and districts did make significant strides, including in Washington, D.C., where the average score increased 10 points. But for the most part, American schools are not showing significant progress. 

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Even more alarming for officials was the obvious divide between higher- and lower-performing students, which has grown wider than ever. Students with the highest scores outperformed their peers from two years ago, making up some ground lost during the pandemic. But the lowest performers are scoring even lower, falling further behind.

The latest setbacks follow a historic backslide in 2022. In that year’s exam, student achievement fell across both subjects and grade levels, in some cases at unprecedented levels.

Children reading at their desk in a classroom.  (Getty Images)

This round of testing again featured students whose lives were disrupted by the pandemic. When COVID hit in 2020, the fourth graders were in kindergarten, and the eighth graders were in fourth grade.

But Carr said poor results can no longer be blamed solely on the pandemic, warning that the nation’s education system faces “complex challenges.”

A survey done alongside the exam found in 2022 that fewer young students were reading for enjoyment, which is linked to lower reading scores. And new survey results found that students who are often absent from class — a persistent problem nationwide — are struggling the most.

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“The data are clear,” Carr said. “Students who don’t come to school are not improving.”

The results provide fresh fuel for a national debate over the impact of pandemic school closures, though they’re unlikely to add clarity given the lack of definitive studies linking school closures to bigger academic setbacks. 

The Associated Press contributed to this report.

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An overwhelming majority of Greenlanders have rejected US President Donald Trump, saying they do not want to be bought by America, according to an opinion poll.

The first survey of Greenlanders since Trump renewed his interest in buying the Arctic island found that 85 per cent did not want to leave the Kingdom of Denmark and become part of the US.

Just 6 per cent said they wanted to join the US, while 9 per cent were undecided, in the poll for Greenlandic newspaper Sermitsiaq and Danish daily Berlingske.

The survey comprised 497 people and was conducted online over the past week by the research firm Verian.

“Trump shouldn’t have Greenland. Greenland is Greenland,” said Lars Løkke Rasmussen, Denmark’s foreign minister, on Tuesday.

Trump’s interest in buying Greenland and his refusal to rule out military force or tariffs against Denmark to achieve his aim have thrust the world’s largest non-continental island and its 57,000 inhabitants into the geopolitical spotlight.

Múte Egede, Greenland’s prime minister, has repeatedly insisted the island is not for sale. “We don’t want to be Danish, we don’t want to be American — we want to be Greenlandic,” he said earlier this month.

Mette Frederiksen, Denmark’s prime minister, embarked on a whistle-stop tour of European leaders on Tuesday, visiting Germany’s Olaf Scholz, France’s Emmanuel Macron, and the Nato secretary-general Mark Rutte.

None mentioned Trump or his threat to seize Greenland publicly, in line with Danish requests for silence to avoid offending the US president.

But Frederiksen said at the end of the trip: “broadly, there is very, very great support for Denmark in this situation”.

Jean-Noël Barrot, France’s foreign minister, said Paris had discussed sending troops to Greenland but that “at this point, it is not Denmark’s wish”.

Five current and former senior European officials told the Financial Times last week that Trump had been aggressive and confrontational in a call with Frederiksen in which he insisted the US still wanted Greenland.

At the weekend, the US president said America would “get” Greenland. He said of Greenlanders: “I think the people want to be with us.”

Denmark and Greenland unveiled a sharp increase in military spending for the Arctic this week, including three new ships and two drones for the island.

Vivian Motzfeldt, Greenland’s foreign minister, told a press conference in Nuuk that it was important her country could look after itself.

“What we need to do is we need to ensure a tomorrow for us in this country. That is our most important responsibility,” she added.

But Trump ridiculed the spending at the weekend saying that “two dog sleds” — trailed by Denmark’s defence minister Troels Lund Poulsen as being part of the package, but not announced this week — was not enough protection for Greenland.

Greenland’s main military protection comes from a US military base in the far north. Politicians on the island as well as in Denmark have said they are open to America expanding its presence.