U.S. stock futures show little reaction to blockbuster jobs report, yields spike

Nasdaq 100 futures climbed more than 1% on Friday, pointing to a rebound on Wall Street for technology stocks a day after the artificial intelligence trade suffered a historic rout sparked by worries over the implications of a Democratic midterms victory on the development of the nascent technology.

Market participants also received a blowout October nonfarm payrolls report, with job growth smashing expectations and levels for prior months being revised up. Stock futures showed little reaction to the data, but U.S. Treasury yields spiked. 

Nonfarm payrolls  

While the AI rout continued to dominate headlines, traders were keeping an eye on the U.S. economic calendar, with the October jobs report taking center stage.

As per the U.S. Bureau of Labor Statistics, total nonfarm payroll employment rose by 165k last month, surging past the consensus estimate of 65k. Employment for August and September were revised upward by a combined 84k. Meanwhile, the unemployment rate ticked down to 4.1% from 4.2% in September. 

With inflation running well above the Fed’s long-term 2% target, the jobs data suggests that the labor market remains very strong. This theoretically gives the central bank more headroom to hike interest rates – a scenario that could herald more pain for Wall Street. The Fed raised rates by 25 basis points in September, with policymakers indicating that sticky inflation was likely to elicit more hikes. 

Chip stocks bounce back 

Chipmakers rebounded before the opening bell. AI semiconductor giant Nvidia rose by roughly 4%, while peers Advanced Micro Devices and Micron were up by 7% and 8%, respectively. An exchange-traded fund tracking the U.S. chip industry also advanced by more than 5%. Data-center firm CoreWeave jumped by more than 9% as well.

U.S. financial markets tumbled 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. The wipeout 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 since March 2020, the height of the COVID-19 pandemic.

Chipmakers were by far the worst hit, with the Philadelphia Semiconductor Index sliding 12.25% for the day. Nvidia (NASDAQ:NVDA), which recently relinquished its title as the world’s most valuable listed company, slumped nearly 10% on Thursday, while rival AMD (NASDAQ:AMD) slid 17%. 

Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) -- all of which plan to spend heavily on AI infrastructure like data centers -- fell between 2% and 4%. 

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.

Losses then spilled over into Friday’s Asian session. 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. 

Stocks in Europe and the United Kingdom have managed to avoid some of the fallout, however.

Along with the post-election jitters, reports said AI-darling Anthropic was facing increased investor scrutiny over its plans to publicly list later this month, with Reuters reporting that the startup could potentially delay a listing. 

Still, analysts at Yardeni Research argued in a note that the selloff represents a "buying opportunity."

"We view the political backlash as another constraint on AI investment, alongside financial and physical bottlenecks. But these are speed bumps, not roadblocks, even though Wall Street seems to be pricing in the latter. We think that’s overdone," the Yardeni analysts said in a note.

Analysts at Citi also suggested that, despite a backlash against AI from American voters, data centers may still be constructed, but "where and how [they] get built may change."

"The pace of construction may also be slower. This is far from ideal for the picks and shovels, including semis," the Citi analysts said.

Ambar Warrick and Anuron Mitra contributed to this article