Chip Stocks Lead Wall Street Rebound as Strong Jobs Data Raises Rate Hike Bets

At one point in the session the Nasdaq was up 2.03% and the S&P 500 up 1.15%, while the Dow Jones Industrial Average slipped 0.15%, according to Al Bayan. Micron rose about 6% after losing nearly 17% the previous day, and Nvidia gained about 5% after a fall of about 9%. Gains shifted through the morning; a Reuters snapshot carried by Yahoo Finance had the Nasdaq up 1.7%, the S&P 500 up 0.6% and the Dow down 0.6%.

The bounce follows the worst day for the Nasdaq since April 2025. On Thursday the index fell 5.5% to 24,315, more than 10% below its record and into correction territory, as investors worried that the Democratic gains in the midterm elections would bring tighter scrutiny of data centre investment and AI infrastructure. The S&P 500 lost 4.4% to 7,353.73 and the Dow dropped about 1,833 points, or 3.4%, to 51,523, with all eleven S&P sectors lower.

The labour data limited the recovery. The US economy added 165,000 jobs in October against a Reuters poll forecast of 65,000, and unemployment fell to 4.1% from 4.2%, the Bureau of Labor Statistics said. September's gain was revised up to 60,000 from 29,000. Average hourly earnings rose 3.1% from a year earlier.

Treasury yields rose after the release before easing, with the two-year yield up 6 basis points to 4.52% and the 10-year up 3 basis points to 4.87%. Bets on a Fed rate hike in December rose to 78% from 70% before the data. Tim Holland of Orion said the report "should make a Fed rate hike more likely and should push up bond yields", which weighs most on high-valuation technology shares.

Stuart Clark of Quilter told Al Bayan that the scale of the falls in some of the largest listed companies showed the concentration risk in the US market, where index moves increasingly depend on a small group of giant companies.

Investors face more tests of AI spending next week, when CoreWeave reports on Tuesday and Cisco, Applied Materials, Cerebras and Nebius report on Thursday.