US stocks opened higher on Friday as chipmakers and technology stocks recovered from Thursday’s sharp selloff.
The Nasdaq Composite led the rebound, while Dow Jones remained under pressure, as investors assessed stronger-than-expected jobs data and concerns about potential restrictions on AI infrastructure development.
The recovery followed a bruising session on Wall Street, where the Nasdaq Composite entered correction territory after its steepest one-day decline in 19 months.
Investors were also weighing the implications of the October employment report and the outlook for interest rates.
Chip stocks lead recovery after Thursday’s rout
The Nasdaq Composite opened 1% higher while the S&P 500 gained 0.35%. The Dow Jones Industrial Average, however, fell 476 points.
Nvidia rose 5.64% in trading after losing 9% on Thursday, its worst session since January 2025.
Micron Technology gained 5.3% after falling 17% in the previous session.
AMD, Intel and Broadcom also advanced between 5% and 9%.
Data-centre operators IREN and Applied Digital, cloud computing companies CoreWeave and Nebius Group, and energy and equipment suppliers GE Vernova and Constellation Energy also recovered from steep losses.
Tesla and SpaceX shares rose 1.5% and 5%, respectively, after declining sharply over the previous two sessions.
Software company Atlassian moved in the opposite direction, falling 11.5% after reporting its first-quarter results.
Airbnb gained 10.39% after raising its full-year 2026 revenue growth forecast.
The rebound followed Thursday’s broad market decline.
The Nasdaq fell 5.5%, moving more than 10% below its recent high and entering correction territory. The S&P 500 lost 4.4%, while the Dow dropped more than 1,800 points, or 3.4%.
All 11 S&P 500 sectors ended lower.
The Magnificent Seven companies collectively lost $1 trillion in market capitalisation during the session.
AI regulation concerns weigh on market sentiment
The selloff was driven partly by concerns that Democratic gains in the midterm elections could lead to tighter restrictions on data-centre development.
Democratic victories in several key states and control of Congress raised questions about the pace of the AI infrastructure buildout.
Texas, a major data-centre hub, became a particular focus after Governor-Elect Gina Hinojosa indicated that the state would seek stronger protections before allowing further development.
The concerns weighed heavily on semiconductor companies and other businesses exposed to AI infrastructure.
The Nasdaq was also heading for its fourth consecutive weekly decline, while the S&P 500 was on track for its worst weekly performance since March 2025.
The CBOE Volatility Index, Wall Street’s fear gauge, recorded its largest one-day jump in about 19 months on Thursday. It eased slightly on Friday to 26.81.
Strong jobs report puts interest rate outlook in focus
Investors also assessed October employment data, which showed that US nonfarm payrolls increased by 165,000, well above economists’ expectations of 59,000.
The unemployment rate declined to 4.1%, compared with forecasts for it to remain at 4.2%.
The stronger labour market data pushed Treasury yields higher and limited gains in equity markets.
Investors are also monitoring the Federal Reserve’s next policy decision, with traders pricing in a more than 76% chance of an interest rate hike in December, according to the CME FedWatch Tool.
Oil prices added another source of uncertainty after rising on Thursday, raising concerns about energy-driven inflation and the possibility of higher interest rates.
Brent crude futures were broadly flat on Friday, although oil remained on course for a sharp weekly decline.
Despite Friday’s recovery, the Nasdaq and S&P 500 remained down around 4.4% and nearly 3%, respectively, for the week through Thursday.
The Dow was relatively more resilient, with a weekly decline of about 0.5%.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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