U.S. chip stocks bounce back sharply after Thursday’s AI rout

 U.S. chip stocks rose Friday, recovering some ground after a sweeping AI-driven selloff Thursday following the Democrats’ midterm election victory earlier this week.

Investors also got a much stronger-than-expected October jobs report, with payroll growth far exceeding forecasts and figures for prior months revised higher. But the stock market was little affected by the data, while Treasury yields jumped.

The iShares Semiconductor ETF jumped 4.9% after the market open by 09:40 ET, and Nasdaq 100 futures rose 1.8%, after the index suffered its worst day since April 2025 on Thursday. The 10-year yield edged higher to 4.88%. 

Among chipmakers hit hard the previous session, Lam Research surged over 10% in early U.S. trading, Micron and Marvell rose about 8%. AMD soared 11.2% and Applied Materials surged over 7%, while Broadcom and U.S.-listed shares of SK Hynix added more than 4%, while Intel jumped 8%.

SanDisk and ARM rose 11.3% and 5.4%, respectively.

Cloud-computing stocks also rallied. Astera Labs gained about 8%, while CoreWeave jumped 7.5% and Oracle climbed 3.1%. European AI-linked stocks, which have fallen sharply since the midterms, staged a modest recovery as well.

The rebound followed another rough session in Asia. South Korea’s Kospi closed more than 6% lower for its worst day since 2025, while Japan’s Nikkei 225 neared correction territory. Memory-chip makers Samsung Electronics and SK Hynix fell more than 6% and 10%, respectively.

Investors have been dumping AI stocks on concerns that Democratic policymakers could block data center projects across the U.S. amid growing voter opposition to their construction. The selling suggests investors are beginning to price in rising local opposition to the data center buildout, with some analysts saying markets have yet to fully weigh the costs it has imposed on U.S. communities.

Thursday was the second straight day of selling in AI shares and the fifth drop of more than 500 points in the Nasdaq Composite since mid-October, as the previously buoyant AI trade has come under growing scrutiny.

Meanwhile, the latest U.S. jobs report came out on Friday, showing that the U.S. economy added 165,000 jobs in October, well above economists’ forecast of 65,000 and up from a revised 60,000 in September.

The unemployment rate ticked down to 4.1%, while economists had expected it to hold at September’s 4.2%.

Average hourly earnings rose 3.1% from a year earlier, slowing from 3.2% but topping the 2.9% increase economists had projected.