Sean Conlon, Jenni Reid, Lee Ying Shan and Paulina Likos of CNBC report the Nasdaq rebounds 1% following worst session in 18 months as traders snap up tech shares:
The Nasdaq Composite rebounded on Friday as some investors bought the dip in chip stocks following a punishing sell-off that sent the index into correction territory.
The tech-heavy Nasdaq bounced 1.09% to close at 24,579.42. The S&P 500 rose 0.31% to end at 7,376.86, while the Dow Jones Industrial Average lost 237.33 points, or 0.46%, and settled at 51,285.73.
Worries of a potential slowdown in data center construction following big Democratic wins in the House and Senate and key state governorships hit U.S. markets hard on Thursday.
The heavy selling on Thursday sent the three major stock averages to their worst one-day losses since April 2025. The Nasdaq Composite tumbled 5.5%, closing more than 10% below its most recent high and putting it in what Wall Street regards as a correction. The broad-market S&P 500 lost 4.4%, while the Dow fell more than 1,800 points, or 3.4%.
All 11 sectors in the S&P 500 closed lower that day, but shares of companies tied to the AI buildout led the decline.
During Friday’s session, shares of Micron Technology were up 5% following a 17% decline on Thursday. Nvidia was nearly 3% higher after a 9% rout the day before and moved back into positive territory for the year.
“The scale of the falls in some of the market’s biggest names has been striking. But it also highlights the concentration risk that has built up in U.S. equity markets,” Stuart Clark, portfolio manager at Quilter, said by email.
“With a relatively small number of technology and semiconductor stocks now carrying so much weight, weakness in those names quickly translates into sizeable falls for the Nasdaq and S&P 500.”
The “Magnificent Seven” stocks shed $1 trillion in total market capitalization on Thursday alone. Along with Nvidia, Tesla, Meta Platforms and Alphabet saw gains Friday.
Top Democrats have called for the curbing of the data center buildout since the party’s big election win. Governor-Elect Gina Hinojosa of Texas — a key data center hub in the country — said in a CNN interview Thursday evening, “We will have laws to protect Texans, and we need to stop what we are doing with data centers until we have those protections.”
Investors’ fears will likely persist given that Hinojosa and others are not slated to take office until January, according to Chris Grisanti of MAI Capital Management. However, the chief market strategist is still optimistic on AI, as he believes that the deals related to the buildout will eventually get done.
“While there’s definitely more of a headwind now after the election, this is an industrial revolution akin to railroads, akin to internet, and it’s not going to stop,” he said. “I don’t think we’re at the bottom, but I think you can see it from here.”
Friday’s relatively upbeat sentiment was kept in check after people familiar with the matter told CNBC that Microsoft is planning to reduce the number of neocloud partners.
Investors were also reacting to the latest nonfarm payrolls report, which came in much better than expected at an increase of 165,000 in October. That was well above the 59,000 that economists polled by Dow Jones had anticipated. The unemployment rate also moved down to 4.1%. Economists had expected it to hold steady at 4.2%.
All three major averages posted losses on the week, even after Wednesday’s big rally in the wake of the election. The Nasdaq lost 3.4% and the S&P 500 dropped 2.7%. The 30-stock Dow was the outperformer, sliding 0.9%.
Looking at the history of Nasdaq corrections shows tech stocks often find their footing over the next three-to-six months, but trading can remain rocky in the near term.
Rich Asplund of Barchart also reports stock indexes push higher as chipmakers roar back:
The S&P 500 Index (SPY) is up +1.07% today, the Dow Jones Industrial Average (DIA) is up +0.21%, and the Nasdaq 100 Index (QQQ) is up +2.09%. December E-mini S&P futures (ESZ26) are up +0.90%, and December E-mini Nasdaq futures (NQZ26) are up +2.00%.
US stock indices are moving higher today, with the Dow Jones Industrials recovering from a 4-week low. The broader market is mostly higher today, recovering some of Thursday’s rout as dip buying in chipmakers and AI-infrastructure stocks lifts the broader market.
Stocks plummeted on Thursday amid speculation that the Democratic sweep of Congress in Tuesday’s midterm elections will usher in a new era of regulation for the artificial-intelligence industry. The rotation out of chipmakers reflects a growing view that public opposition to data centers could crimp the growth of chipmakers and data-center suppliers. The weakness in software stocks today is limiting the upside in the overall market.
Stocks added to their gains today on better-than-expected US economic news. The Oct nonfarm payrolls and average hourly earnings rose more than expected, and the unemployment rate unexpectedly declined. Consumer sentiment also improved, and inflation expectations declined in the University of Michigan’s Nov consumer sentiment index.
US Oct nonfarm payrolls rose by +165,000, stronger than expectations of +70,000 and the biggest increase in 7 months. Also, Sep nonfarm payrolls were revised upward to +60,000 from the previously reported +29,000. The Oct unemployment rate unexpectedly fell -0.1 to 4.1% versus expectations of no change at 4.2%.
US Oct average hourly earnings rose +0.4% m/m and +3.1% y/y, stronger than expectations of +0.3% m/m and +2.9% y/y.
The University of Michigan US Nov consumer sentiment index rose +3.0 to 51.0, stronger than expectations of no change at 48.0.
The University of Michigan US Nov 1-year inflation expectations fell -0.4 to 4.3%, weaker than expectations of 4.6%. The Nov 5-10 year inflation expectations fell -0.1 to 3.4%, weaker than expectations of no change at 3.5%.
Hawkish comments today from New York Fed President Williams were negative for stocks and bonds as he said that inflation is “absolutely too high” and monetary policy “does have a critical role in making sure that these relative price shocks don’t translate into broader or more persistent inflation.”
Dec WTI crude oil prices (CLZ26) gave up an early advance and are down -0.5% today on signs that the US and Iran are moving closer to a potential breakthrough in efforts to end the war, with Iran showing a willingness to discuss issues related to its nuclear program that were previously off the table. Qatar, which is mediating efforts to end the war, said today that Emir Sheikh Tamin Bin Hamad Al-Thani spoke with President Trump about efforts to resolve differences between Iran and the US and secure a comprehensive agreement to end the conflict.
Crude prices initially moved higher today as Ukraine intensified its attacks on Russian refineries, having launched a drone attack on a sixth Russian crude-processing plant in the past week. Russia’s Yanos refinery, which has a capacity of 300,000 bpd, has halted operations following a drone attack late Wednesday, which could further curb global distillate supplies.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +31% from a year earlier, up from a July estimate of 22%. As of today, 440 of the S&P 500 companies have reported results, with 84% beating estimates.
Overseas stock markets are lower today. The Euro Stoxx 50 is down -1.38%. China’s Shanghai Composite closed down -1.10%. Japan’s Nikkei-225 Stock Average tumbled to a 6.75-month low and closed down sharply by -5.96%.
Interest Rates
December 10-year T-notes (ZNZ6) are down by -6 ticks today. The 10-year T-note yield is up +2.3 bp to 4.857%. T-notes are under pressure today as a rebound in equity markets has curbed safe-haven demand for T-notes. Also, hawkish comments today from New York Fed President Williams weighed on T-notes when he said that inflation is “absolutely too high.” T-note losses accelerated today on a stronger-than-expected US Oct payroll report that showed non-farm payrolls and hourly earnings rose more than expected, and the unemployment rate unexpectedly declined, hawkish factors for Fed policy.
The markets are now pricing in a 78% chance of a +25 bp rate hike at the FOMC’s next meeting on December 8-9.
European government bond yields are moving higher today. The 10-year German bund yield rebounded from a 2.5-month low of 3.207% and is up +1.5 bp to 3.255%. The 10-year UK gilt yield is up +2.1 bp to 5.153%.
Eurozone Sep retail sales fell -0.7% m/m, weaker than expectations of -0.1% m/m.
German Sep industrial production unexpectedly rose +0.7% m/m, stronger than expectations of -0.1% m/m.
The markets are now pricing in an 80% chance of a +25 bp rate hike at the ECB’s next policy meeting on December 17.
US Stock Movers
Chipmakers and AI-infrastructure stocks are moving higher today, recovering some of Thursday’s rout. The iShares Semiconductor ETF (SOXX) is up more than +3%. Advanced Micro Devices (AMD) is up more than +10% to lead gainers in the Nasdaq 100, and Lam Research (LRCX) is up more than +9%. Also, Intel (INTC) and KLA Corp (KLAC) are up more than +6%, and Sandisk (SNDK), and Qualcomm (QCOM) are up more than +5%. In addition, Applied Materials (AMAT), ASML Holding NV (ASML), and Marvell Technology (MRVL) are up more than +4%.
The Magnificent Seven Technology stocks, sans Microsoft, are moving higher today, a positive factor for the overall market. Tesla (TSLA) is up more than +4%, and Nvidia (NVDA) is up more than +3% to lead gainers in the Dow Jones Industrials. Also, Meta Platforms (META) is up more than +2%, and Amazon.com (AMZN) and Alphabet (GOOGL) are up more than +1%. In addition, Apple (AAPL) is up +0.46%.
Cloud infrastructure stocks are moving higher today, recovering some of Thursday’s sharp decline. Nebius Group NV (NBIS) and Applied Digital (APLD) are up more than +7%, and Arista Networks (ANET) is up more than +6%. Also, Lumentum Holdings (LITE) is up more than +5%, CoreWeave (CRWV) is up more than +4%, and Oracle (ORCL) is up more than +2%.
Atlassian (TEAM) is down more than -16% to lead software stocks lower despite reporting better-than-expected Q1 results, as its future outlook was seen as underwhelming. Also, Salesforce (CRM) is down more than -3% to lead losers in the Dow Jones Industrials, and Thomson Reuters (TRI) and Intuit (INTU) are down more than -3%. In addition, Autodesk (ADSK) and Workday (WDAY) are down more than -2%, and Adobe Systems (ADBE) and IBM (IBM) are down more than -1%.
Cloudflare (NET) is up +12% after raising its full-year adjusted EPS forecast to $1.35 from a previous estimate of $1.25 to $1.26, above the consensus of $1.27.
Airbnb (ABNB) is up more than +9% after reporting Q3 revenue of $4.87 billion, stronger than the consensus of $4.75 billion, and forecasting Q4 revenue of $3.22 billion to $3.28 billion, well above the consensus of $3.16 billion.
Akamai Technologies (AKAM) is up more than +8% after reporting Q3 adjusted EPS of $1.77, better than the consensus of $1.68.
Moderna (MRNA) is up more than +6% after reporting Q3 revenue of $1.33 billion, stronger than the consensus of $888.1 million.
DraftKings (DKNG) is down more than -27% after reporting Q3 revenue of $1.33 billion, weaker than the consensus of $1.39 billion, and forecasting 2027 revenue of $7.35 billion to $7.75 billion, the midpoint below the consensus of $7.61 billion.
Axon Enterprise (AXON) is down more than -17% to lead losers in the S&P 500 and Nasdaq 100 after forecasting full-year adjusted Ebitda of $924 million to $929 million, weaker than the consensus of $949.4 million.
Microchip Technology (MCHP) is down more than -13% after forecasting Q3 net sales of $1.57 billion to $1.64 billion, the midpoint below th consensus of $1.62 billion.
Charter Communications (CHTR) is down more than -2% after reporting Q3 free cash flow of $674 million, well below the consensus of $1.5 billion.
Earnings Reports (11/6/2026)
Charter Communications Inc (CHTR), Franklin Templeton Inc (BEN), Humana Inc (HUM), Moderna Inc (MRNA), PPL Corp (PPL), Vistra Corp (VST).
It was quite an eventful week with US midterms, all looked calm afterwards until we hit Thursday morning.
So why the massive tech rout on Thursday, where $2.5 trillion in market cap evaporated?
The official script is “worries of a potential slowdown in data center construction following big Democratic wins in the House and Senate.”
I don’t buy it.
Volume on the Nasdaq was actually normal on Thursday. Some chip names saw elevated volume but there wasn’t this massive exodus out of tech.
Then the FT reported that multistrategy hedge fund Walleye Capital was slimming its equity desk and handing back money to clients.
Today, Bloomberg reported that Walleye Capital plans to return approximately $2 billion to clients as the hedge fund scales back its equities trading operations
So basically, a massive $17 billion hedge fund cut its equities trading operations, and partially liquidated its massive portfolio.
Just three weeks ago, Business Insider reported that Walleye is beefing up its stock-picking unit despite losing a key executive to Citadel:
Walleye Capital isn’t letting the recent departure of a key executive derail the expansion of its stock-picking unit.
The $17 billion asset manager has hired a pair of executives this month to support its equity long-short division, after Matt Giannini left to return to Ken Griffin’s Citadel in September. Giannini had been the chief operating officer of the unit, a significant addition to the firm, before departing after less than a year in the role.
Walleye has hired Jordan Tanner, Balyasny Asset Management’s chief equities strategist, and Anna Dev, a Millennium Management recruiter, a person close to the firm told Business Insider.
Then yesterday, Business Insider reported $17 billion Walleye cut stock-picking head and ‘substantial portion’ of equity portfolio managers after rough October:
On the heels of a 5.9% loss in October, $17 billion Walleye Capital is making a change.
The firm has cut its head of equity long-short, Anil Gondi, according to a letter to investors, seen by Business Insider.
Following its worst month since March 2020, the firm is taking a hard look at “every aspect” of the firm, the fund’s CEO and chief investment officer, Will England, wrote.
What the hell is going on? Matt Giannini left to return to Ken Griffin’s Citadel in September, and then the equities trading business is closed after a poor performance in October?
Did Matt Giannini tip off Griffin as to weaknesses in Walleye’s equity portfolio? Did Citadel absorb that portfolio as it did when Situation Awareness got into trouble with leverage? Are there other hedge funds in trouble, selling equity positions? (most likely)
I have no clue. All I know is Thursday’s rout sure felt like a hedge fund was liquidating massive (levered) positions in tech shares, especially chip names that got dinged hard:
I just don’t buy the media version that a Democratic sweep on Tuesday will lead to a marked slowdown in the build-out of data centers.
This is all nonsense; there was definitely something else going on.
If you trade long enough, you know when there is real systemic fear (eg., back in 2008 after a massive credit crisis erupted) and when it’s just another over-leveraged hedge fund liquidating positions.
Nothing on Thursday felt like systemic risk or fear. Sure, retail threw in the towel, the VIX spiked, but it wasn’t systemic fear.
Again, the volume on the Nasdaq was quite average on Thursday; it was more elevated in specific chip stocks like Micron and Sandisk.
As far as the tech rout, when I see the 5-year weekly chart of Nasdaq-100, the latest dip was a buy for me:
Yes, chip stocks are weak and can weaken further but even there, they will base and move right back up:
And to be sure, momentum stocks got clobbered hard in October and so far in November (has lots of chip stocks), but the selloff has been ferocious and swift; it tells me we may have another week of weakness, and things will revert there:
Alright, that’s all from me. Enjoy your weekend, everyone.
Below, the CNBC Investment Committee discusses the rebound by major averages, which is well short of erasing Thursday’s losses.
Next, Jack Caffrey, JPMorgan Asset Management equity portfolio manager, joins ‘Squawk Box’ to discuss the latest market trends, what to make of Thursday’s stock market rout, and more.
Lastly, The Hostile takeover discusses how some weakened hedge funds are forced to sell and goes over which stocks are most vulnerable (listen carefully to this).