The rebound after the sell-off
According to BBC reporting, shares in artificial intelligence and technology companies have recovered some of their losses after a massive wave of selling that had wiped out trillions of dollars in market value. The tech-heavy Nasdaq Composite opened higher on Friday and closed with a gain of 1.4%, which partly offset the 5.5% decline suffered in the previous session. The S&P 500 rose about 0.7%, while the Dow Jones Industrial Average was essentially flat.
Nvidia, which had lost more than 9% and hundreds of billions in market capitalization on Thursday, recovered more than 3% on Friday. Semiconductor makers showed a similar pattern: AMD and Micron had both fallen more than 17% on Thursday, then rose about 10% and more than 5%, respectively. Shares in SpaceX and Tesla, also hit in the previous session, posted gains of more than 8% and close to 5%, respectively.
The causes of the sell-off and the election context
The source links the wave of selling, which began in the United States on Thursday and spread to Asian and European markets on Friday, partly to fears that a Democratic victory in the midterm elections could slow the development of artificial intelligence. Several Democratic figures had campaigned for new rules on AI and data centers, and the party won control of both chambers of Congress as well as key races in states involved in the race for AI data centers.
US President Donald Trump reiterated on Friday his support for what he calls 'superintelligence', arguing that only 'foolish leadership' would say no to the wealth it brings. The BBC also reports remarks by Russ Shaw, founder of Tech London Advocates, who said the election result signals the need for a rethink on AI: the new Congress, he said, will focus on the issue very forcefully, and companies are not effectively communicating the benefits of AI, while communities watch data centers arrive with rising energy costs.
Global markets and jobs data
While Wall Street recovered, according to the BBC markets in Asia and Europe ended the week on a worse note. South Korea's Kospi index ended the session down 6%, with shares in chipmaker SK Hynix down more than 10%. In Europe, the main indices in Germany, France and Spain closed lower; in London, the FTSE 100 fell 1.01%, also following the Bank of England's decision to raise rates and its signal of possible further increases to contain prices.
On the macroeconomic front, the source reports US jobs figures above expectations: according to the Bureau of Labor Statistics, employment rose by 165,000 in October, more than double analysts' forecasts, with the unemployment rate falling to 4.1% from 4.2% in September and stable within a narrow range since March. The BBC quotes Dan Coatsworth of AJ Bell, for whom the key question is whether the rise in the S&P 500 and Nasdaq will be sustained, and Neil Birrell of Premier Miton, according to whom a robust US economy could reduce the risks feared by markets. As the same cited observers note, it remains to be seen whether the recovery in tech stocks is lasting or only temporary.
