AI stocks climb after trillions wiped from market values
Investors had been selling off tech shares in part due to concerns the Democrat election victory would mean slower AI development.
Key points
- The Nasdaq opened 1.23% higher on Friday after falling 5.5% on Thursday.
- Tech shares were sold off partly over concerns that Democrat midterm wins would slow AI development.
- US employers added 165,000 jobs in October, more than double what analysts expected.
The tech-heavy Nasdaq opened higher on Friday, recovering part of a 5.5% fall from Thursday, after a sell-off in tech shares spread from the US to Asian and European markets. The Nasdaq Composite was up 1.23% in early trading, while the S&P 500 opened slightly higher and the Dow Jones Industrial Average opened a little lower.
Investors had been selling tech shares partly over concerns that the Democrat victory in the midterm elections would mean slower artificial intelligence development. Democrats campaigned for new rules on AI and data centres and have won control of both houses of congress.
Hard-hit firms bounce back
Companies that lost heavily on Thursday rebounded in early trading. Nvidia, which shed hundreds of billions in market value after shares slid more than 9%, was up more than 6% on Friday. SpaceX and Tesla shares rose more than 7% and nearly 3% respectively.
US President Donald Trump on Friday repeated his support for what he calls "super intelligence", saying only "foolish leadership" would "say no to the riches they bring".
The US economy is running hard which may mean the risks the markets are worrying about at the moment are not such a risk to the real economy as is being feared
— Neil Birrell
Jobs figures beat forecasts
US employers added 165,000 new jobs in October, well above the average monthly increase and more than double what analysts had expected. The unemployment rate eased slightly to 4.1% from 4.2% in September, and the Bureau of Labor Statistics said it has stayed between 4.1% and 4.3% since March.
Professional and business services led the gains with 70,000 jobs, followed by healthcare with 42,000, with jobs also added in transportation and warehousing and manufacturing. Neil Birrell, chief investment officer at Premier Miton, said the figures were still important despite the market movements.
What an investor said
Birrell said the strong economy may mean the risks worrying markets are less serious for the real economy than feared.
