American indexes and tech stocks picked up in the opening minutes of Friday trading as investors anticipated another day of volatility in an unsteady week for markets worldwide.
Asian and European stock markets dropped Friday, extending losses seen in U.S. indexes a day earlier amid investor concerns that Democratic control of Congress could increase regulatory scrutiny of AI development.
But major stock indexes rose slightly in the initial hours of Friday trading, with the tech-heavy Nasdaq composite index and the S&P 500 both up. The Dow Jones Industrial Average lost a little ground.
Chip stocks, which took heavy losses Thursday, opened Friday to an initial rebound. The iShares Semiconductor ETF, an investment fund tracking chips, rose about 5 percent. Nvidia, Taiwan Semiconductor and Broadcom all rose. Other technology stocks did not see as dramatic gains; Microsoft and Apple had slight dips by 10:30 a.m. Friday.
Early Friday, the price of Brent crude oil, the international benchmark, jumped back up to $99 a barrel, around 6 percent higher than a day earlier when the decisive midterm results boosted hopes of a renewed push to end the Iran war. It still remains below the $117 a barrel mark from one week ago.
Slides in European and Asian markets followed major U.S. stock markets tumbling on Thursday, largely erasing post-election gains, as investors processed the impact of Democratic success in the midterm elections.
The U.S. economy showed unexpectedly strong jobs numbers Friday morning, with the unemployment rate ticking down to 4.1 percent. The economy added 165,000 jobs in October, nearly triple what forecasters had expected.
The strong employment numbers buoyed expectations for the Federal Reserve to hike interest rates in December, potentially raising the cost of borrowing. The market jitters come as investors weigh the sustainability of America’s AI boom, with reports circulating Thursday that Anthropic, the maker of the chatbot Claude, may go public at a lower valuation than expected.
By Thursday’s close, the S&P 500, a broad index of 500 large American companies, had lost about 4 percent, while the Nasdaq lost around 5.5 percent amid fears that the election results could spur greater regulatory oversight of the AI-related development boom that has fueled market gains in recent months.
Tech stocks including Google parent company Alphabet, Apple, Meta, Space X and Nvidia — the chip company central to the AI boom — all lost ground in Thursday’s trade. South Korean companies Samsung and SK Hynix, which make AI chips, also saw their share price fall, though some tech stocks regained ground early Friday.
Dozens of ballot measures placing restrictions on data center development were approved in Tuesday’s elections, while states that have been hubs of data center development including Texas and Ohio will have new Democratic governors who have promised tighter regulation.
Priscilla Thiagamoorthy, a senior economist at the Bank of Montreal, said in a note after markets closed Thursday that the pullback was notable because stocks had for so long resisted “mounting economic headwinds.”
“But Thursday’s sell-off was a reminder that when expectations and valuations become stretched, even a modest shift in sentiment can trigger a swift repricing,” she added.
Ed Mills, a policy analyst at the firm Raymond James, said he expected to see continued volatility in AI driven by policy.
“We see very frequently after big moves, a recovery, [but] it’s too early to know exactly where that is,” he said.
Japan’s Nikkei and Korea’s KOSPI index both dropped about 6 percent, while Hong Kong’s Hang Seng and the Shanghai composite index fell about 1 percent on Friday. Major stock indexes in the U.K. and Germany lost more than 2 percent, while France’s CAC 40 index fell nearly 1.8 percent.
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