Nasdaq opens higher as chips pare losses, rate-hike fears linger

Canada’s ​main ‌stock index opened lower on ⁠Friday ​and was set for its ​third ‌straight week of losses, as investors were ‌cautious ​after ‌a ​tech rout in ⁠the previous session, ⁠while ​assessing data that showed unemployment rate hit a six-month ⁠high in October.

The S&P/TSX Composite Index was ​down 0.33 per cent ⁠at 35,487.49 points at ‌9.34 a.m. ET.

Canada’s unemployment rate went up to a six-month high in October and the economy lost a few thousand ⁠jobs as ​the private sector and full-time employment saw declines, data showed on Friday.

The unemployment rate edged up to 6.7 per cent in October from 6.5 per cent in the prior month, Statistics Canada said. The last time it was higher than this level ​was 6.9-per-cent jobless rate in April.

The economy lost ‌a net of 4,700 jobs in the month, taking the total size of the jobs the economy lost this year to 46,000 overall.

The October report highlights a continued weakness in the labor market in Canada that has failed to post any job gains ‌on average this ​year as trade tensions ‌between the U.S. and Canada worsened and businesses hunkered down to save costs.

The ​Nasdaq opened ‌higher on Friday as chip stocks came ⁠off ​heavy losses posted during a sharp selloff on ​fears that ‌a Democratic-led Congress could result in tougher AI regulation, ‌even ​as ‌the jobs ​report raised interest-rate ⁠hike concerns.

The Dow ⁠Jones Industrial ​Average fell 486.37 points, or 0.94 per cent, to 51,036.69. The ⁠S&P 500 rose 19.44 points, or 0.26 per cent, ⁠to 7,373.17, ​while the Nasdaq ⁠Composite rose 299.54 points, ‌or 1.23 per cent, to 24,614.53.

Europe’s main bourses tumbled over 1.5 per cent as the turmoil continued to play out, but the Nasdaq rising and Wall Street’s VIX fear gauge also easing, investors were hoping for a ⁠respite of ​sorts.

Key AI stocks were mixed. Nvidia rose 6.1 per cent in early trading, after suffering its worst day since January 2025, when the emergence of low-cost Chinese AI model DeepSeek hammered markets.

Other heavyweight chipmakers, including AMD, Intel , Broadcom and Micron Technology, were up between 4.5 per cent and 8 per cent, while Elon Musk’s Tesla and SpaceX were also up 2 per cent and 4 per cent after losses earlier this week.

The expected bounces were in stark contrast with market action in the rest of the world.

In Asia, Japan’s Nikkei and South Korea’s KOSPI both slumped about ​6 per cent. For the Nikkei — just like Wall Street the previous day — it was the biggest one-day drop since US ‌President Donald Trump’s “Liberation Day” trade tariff panic of April 2025.

Taiwan’s benchmark plunged more than 8 per cent at one point, before cutting losses as authorities scrambled to stem the selling.

“This has been brutal,” James Athey, a fund manager at investment firm Marlborough in London, said, explaining that retail and hedge fund selling had been feeding off each other.

“The question is where we go now? We are still looking at indexes that are near record highs and a sector (AI) where capex is still massive,” Athey said. “So I think it is going to be a huge test of market sentiment - and the belief ‌in AI - in ​the coming days.”

The strain on equities meant the ‌US dollar, Japanese yen and Swiss franc all lured safe-haven flows, although the rally in government bonds took a breather.

The yield on the benchmark U.S. 10-year Treasury note ticked up ​to 4.86 per cent in Europe, having dropped to its lowest level since September 9 overnight.

US nonfarm payrolls, ⁠usually one of the most-focused on pieces of data, but largely overshadowed by the tech drama, showed a stronger-than-expected 165,000 pickup in jobs.

An anticipated slowdown ⁠in annual wage growth to below 3 per cent for the first time in nearly 5-1/2 years did not materialise either as it came in at 3.1 per cent.

Japan’s 10-year bond yield dipped as far as 1.795 per cent overnight, the lowest ​since June 30. The yield on triple-A-rated German bunds fell to its lowest level since late August early on in Europe too before nudging back up to 3.25 per cent.

Oil prices tiptoed back up towards US$100 a barrel, but are still set for their biggest weekly drop though since 2020 on hopes the midterms’ results might prompt Trump to de-escalate the Iran war.

“Bonds are increasingly behaving like bonds again, with income re-emerging as the primary driver of returns,” said Masahiko Loo, chief fixed-income strategist at State Street Investment Management.

The rise in the Nasdaq and the dip in the VIX pointed to a return to relative ⁠calm, although nerves around the AI boom have ratcheted up significantly since this week’s historic Democrat wins in U.S. midterm elections.

Texas’ Democratic Governor-elect Gina Hinojosa said on Thursday that the state — which already has a large share of U.S. data centres — will introduce new laws to protect local communities from their further mass buildup.

The tech-heavy Nasdaq slumped 5.5 per cent on Thursday — or US$2.5-trillion. Some US$3-trillion was also wiped off S&P 500 firms, with investors worried the brakes will soon be applied to the AI boom more broadly.

“It’s actually a bit of a disaster,” said Christopher Forbes, head of Asia and Middle East at CMC Markets.

“All night, all day – we had client margin calls, client complaints ... because it’s ⁠a very emotional thing, right? People are wedded to their positions and views on a stock or outcome ​and you’re telling them, look, you’ve just lost money.”

The jitters are hitting an AI trade already under pressure from fears that the massive cost of the data centres and other infrastructure ⁠will limit future returns, spurring margin calls and spooking retail investors and hedge funds alike.

Some of Asia’s authorities stepped in overnight to try to soothe nerves.

South Korea temporarily eased rules on retail investors’ leveraged investments ‌and multiple sources told Reuters that Taiwan’s Ministry of Finance called senior executives at state-owned banks, instructing them to support the market.

Taiwanese stocks closed down 4.5 per cent, recovering somewhat from their early morning ​slump. For the week though, the index lost 12.2 per cent, its biggest weekly drop since 1991, LSEG data showed.

Korean AI chipmakers also trimmed some of their losses although still closed sharply lower. In Japan, tech investor SoftBank slid 11 per cent, with the cost of insuring its debt against a default jumping to its highest in four years.

“After damage like the sort we’ve been facing, it is difficult to think that we simply can bounce from here,” said Steve Sosnick, chief strategist at ​Interactive Brokers.

“We may be oversold in the short term, but the underlying questions and causes can’t simply be wiped away.”

Reuters