Nasdaq futures bounce after Thursday's AI rout, but a hot jobs report pushes yields higher and leaves the Dow behind

Wall Street is heading for a mixed open on Friday. Nasdaq-100 futures were up 1.26% as dip buyers returned to artificial-intelligence and chip stocks, a day after the worst session for the major averages since April 2025. S&P 500 futures were flat, up 0.04%, while Dow futures slipped 0.96%. The VIX jumped about 63% to 27.07.

A rebound, with scars

Thursday's damage was broad. The S&P 500 lost 4.4% and the Dow fell more than 1,800 points, or 3.4%. All 11 S&P sectors closed lower, on fears that Democratic midterm wins could slow data-centre construction. The Nasdaq Composite tumbled 5.5% and finished more than 10% below its recent high, which Wall Street treats as a correction. The Philadelphia Semiconductor Index plunged 12.2%, and the seven largest tech stocks shed more than $1trn in market value.

Even so, all three major averages are still heading for weekly losses. Through Thursday the Nasdaq was down about 4.4% on the week and the S&P 500 almost 3%. The Dow was off only 0.5%.

Stuart Clark of Quilter said the fall exposed "the concentration risk that has built up in U.S. equity markets". History offers some comfort: tech stocks often find their footing within three to six months of a Nasdaq correction, though near-term trading can stay rocky.

The jobs report complicates matters

The October payrolls report was a second driver. Employers added 165,000 jobs, against a forecast of 59,000, the most in seven months. September was revised up to 60,000 from 29,000. The unemployment rate fell to 4.1%, although the broader U-6 measure rose to 7.9%. Average hourly earnings rose 0.4%, ahead of the 0.3% expected, and are up 3.1% from a year earlier.

Markets read the data as a reason to expect a Fed rate hike in December. The 10-year Treasury yield rose to 4.872% and the 2-year to 4.526%, while the dollar index gained 0.6% to 102.2. Gold slipped 0.94% to $4,049. The Fed gets one more jobs report and a full set of inflation data before its next meeting.

Asia sells, Europe holds

Asian markets were set to open sharply lower. SK Hynix fell 10.4% in Seoul, SoftBank 10.8% and Samsung Electronics 6.4%, while TSMC lost 4.7%. Timothy Moe of Goldman Sachs blamed position unwinding and stop-loss selling, and warned that opposition to American data centres could dent demand for Asian AI-hardware suppliers. Europe fared better: ASML rose 4%.

Movers

The chip complex led the bounce. Lam Research rose 11.5% after its board approved a $25bn buyback and a $0.33 quarterly dividend, having dropped 16.4% on Thursday. Micron gained 9% after a 17% drop, and Nvidia added 3% after a 9% rout that erased more than $440bn of value.

Earnings produced sharper moves. Cloudflare jumped nearly 20% after third-quarter revenue rose 39% to $782.5m and fourth-quarter guidance of about $845m far exceeded the $796m consensus. JFrog surged 23% on a raised full-year outlook. Airbnb gained 14% after beating forecasts and guiding fourth-quarter revenue higher; chief executive Brian Chesky said the firm is "back in growth mode".

Losers were just as striking. DraftKings dropped 20% after a third-quarter loss of $0.94 a share, far wider than the $0.39 expected. Atlassian fell 18% on a forecast of declining data-centre revenue, and Five9 lost 17% after trimming guidance. Under Armour sank 12% as it raised its estimated hit from the Middle East conflict to about $45m.

Politics and geopolitics

President Donald Trump said he is "100% in favor" of the AI buildout, calling data centres "GOLD" on Truth Social. Many Democrats won on Tuesday campaigning against them, and some have called for moratoriums. Texas Governor-elect Gina Hinojosa said her state should halt data-centre work until protective laws are in place.

Oil edged higher as Mr Trump weighed whether to escalate the war with Iran. WTI traded at $91.02 and Brent at $98.60, after briefly nearing $100. Iran said at least five vessels have reported incidents in the Strait of Hormuz since Sunday, mostly from hitting mines.

Separately, Elon Musk said Tesla will end Cybertruck production in Texas around the middle of next year to make room for the Cybercab robotaxi.

What to watch

Three things matter today: whether the chip rebound holds, how far Fed-hike bets build after the jobs data, and Mr Trump's decision on Iran. Renewed selling in AI stocks would pressure the Nasdaq again, escalation would lift oil, and more strong data would push yields and the dollar higher.