Rebounding tech stocks are driving U.S. indexes higher Tuesday, a day after they tumbled on doubts about whether the artificial-intelligence frenzy really needs all the dollars being poured into it. The S&P 500 was 1% higher in late trading and clawing back nearly two-thirds of its earlier drop.

While companies like DeepSeek may find success in certain market segments, they face an uphill battle against this massive capital advantage. In other words, claims that demand for Nvidia's premium chips will collapse simply don't align with market realities and the trajectory of AI development.

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