AI wipeout in focus; U.S. employment data ahead - what’s moving markets

 Futures linked to the main U.S. stock indices are mixed, with the Nasdaq contract holding on to gains, as investors look to pick up the pieces from a massive artificial intelligence-driven wipeout sparked by the Democrats’ election win earlier this week. Shares of Tesla and SpaceX drop, shaving estimated billions of dollars from their market value and boss Elon Musk’s personal fortune. Major investors are now beginning to question whether Anthropic could go public at a $1.5-trillion valuation, while key U.S. jobs data looms large. 

1. Futures subdued after AI rout

U.S. stock futures were floating around both sides of the flatline on Friday. By 03:00 ET (08:00 GMT), the Nasdaq 100 futures contract had ticked up by 232 points, or 0.9%, S&P 500 futures were mostly unchanged, and Dow futures had fallen by 534 points, or 1.0%.

Markets shuddered on Thursday, spurred by traders fearful of greater Democratic regulation of AI racing to exit stocks exposed to the nascent technology and pick up cash. Chipmakers, data centers developers, power providers -- the rout spread rapidly through the tech industry, eventually shedding an estimated $2.5 trillion in total market value off the Nasdaq Composite. It was a drop not seen March 2020, the height of the COVID-19 pandemic.

The selloff bled into wider equities, underscoring just how much the AI boom has been propping up overall economic growth. At the end of the session, the benchmark S&P 500 had slumped by 4.36% and the blue-chip Dow Jones Industrial Average had plummeted by 3.44%. A tracker of market volatility surged to its biggest daily jump since U.S. President Donald Trump rolled out his sweeping Liberation Day tariffs last year.

Global stocks were not spared, either. The MSCI Asia Pacific index fell to its largest decline since 2025, while stocks in Japan tumbled and Taiwan’s key index dipped into bear market territory. In South Korea, where chip firms SK Hynix and Samsung Electronics have been major winners of the AI era, stocks fell so much a circuit breaker was triggered. Meanwhile, the pan-European Stoxx 600 opened in the red.

"Growing fears about the sustainability of the AI buildout in the context of the major shift in U.S. politics have cause[d] another bruising day for tech stocks," said Joe Maher, Markets Economist at Capital Economics, in a note.

"Whether the mid-terms shock turns out to be the catalyst that derails the AI equity boom remains to be seen, but it strengthens our sense that the boom is in its final innings."

2. Musk stocks crater

One of the central losers from the AI freefall may be Elon Musk, after a slide in shares of the tycoon’s companies contributed to the broader malaise in stocks.

Musk’s electric car giant Tesla retreated by 11%, bringing its decline so far this year to roughly 24%. SpaceX, the rocket behemoth Musk took public in a blockbuster offering just months ago, declined by 9%.

When the dust settled, the plunge shaved about $460 billion from the combined market value of the two stocks, according to calculations from Bloomberg News. Musk himself saw his net worth fall by $71 billion to $793 billion at one point, although he remains the world’s richest man, Bloomberg reported.

While the companies were part of a larger selloff on Thursday, their slump was notable given Democratic victories in Texas, where Tesla and SpaceX are headquartered. Texas Governor-elect Gina Hinojosa has pledged to begin a moratorium on data center development in the state and James Talarico, who became the first Democrat to win a Senate seat in Texas since the late 1980s, has taken aim at Musk’s heavy contributions to Republican rival Ken Paxton.

3. Major investors skeptical of $1.5-trillion Anthropic IPO valuation - WSJ

The sudden tech unwinding may have also bruised Anthropic, whose possible initial public offering has become closely tied to the fortunes of AI and the American economy.

Anthropic has been reportedly aiming to go public the week prior to Thanksgiving, with the Claude-maker expected to raise as much as $100 billion at a valuation of about $1.5 trillion.

However, three major investors who plan to participate in the IPO now believe that value could fall, with one suggesting that it may potentially go down to $1 trillion, according to The Wall Street Journal.

Still, some investors are keen to see Anthropic’s October returns before slashing the valuation, the WSJ reported, adding that a metric the firm uses to estimate annual revenue exceeded $80 billion at the end of last month. Anthropic may also decide to raise less money than previously projected, one investor told the WSJ, while another wondered if the IPO might be delayed until more favorable market conditions come along.

4. U.S. jobs report ahead

Even as they pick through the equity-market wreckage of Thursday, investors must now turn the page to the all-important U.S. employment report later today.

The U.S. is expected to have added 65,000 roles in October, up from 29,000 in the preceding month, and the unemployment rate is seen matching September’s level of 4.2%.

Signs of resilience in the labor market could bolster the case for the Federal Reserve to raise interest rates at its final gathering of the year in December. The Fed has signaled a desire to corral elevated inflation, and a robust jobs picture could give them more headroom to do so by lifting borrowing costs.

However, analysts at Deutsche Bank flagged that "with AI fears gathering pace again," there has been "a fresh round of question marks as to whether the Fed would hike again." Market pricing for a rate increase decreased following the stock market slump.

5. Oil prices choppy

Oil prices were volatile as fresh attacks on tankers in the Middle East heightened supply disruption concerns, although prices remained on course for sharp weekly losses as investors reassessed the outlook for the U.S.-Israeli war with Iran.

Benchmark Brent crude settled nearly 4% higher on Thursday, while WTI crude gained 2.7%. The rebound followed a decline on Wednesday, when both benchmarks plunged more than 8% to their lowest closing levels since August 31, as U.S. midterm election results initially raised hopes of renewed diplomatic efforts to end the conflict.

At least five vessels have reported incidents since Sunday, according to the United Kingdom Maritime Trade Operations (UKMTO), with the pace of attacks approaching October’s record of 35 reported vessel incidents.

The Islamic Revolutionary Guard Corps said two oil tankers and a tugboat caught fire in separate incidents after attempting to navigate unauthorised routes through the Strait of Hormuz.

Saudi Arabia also issued warnings about potential danger near Yanbu, its Red Sea oil export hub, as Yemen’s Iran-aligned Houthi militants continued attacks on the kingdom.