US stocks today: Nasdaq rebounds from tech rout but extends weekly losing streak to four weeks

Wall Street's technology stocks rebounded on Friday after suffering their steepest selloff in more than a year, but the recovery was not enough to prevent the Nasdaq Composite from posting its fourth consecutive weekly decline. Investors continued to assess whether concerns over tighter AI regulation and a potential slowdown in data centre spending could threaten the rally that has driven US equities to record highs, Reuters reported.

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The Nasdaq gained 1.09% to close at 24,579.43, while the S&P 500 rose 0.32% to 7,376.92. The Dow Jones Industrial Average slipped 0.46% to 51,286.21,


Despite Friday's gains, the S&P 500 was heading for its worst weekly performance since June, Reuters reported.

Chip stocks lead Wall Street's recovery

Semiconductor stocks spearheaded the rebound, with Nvidia, Advanced Micro Devices and Sandisk recovering from Thursday's steep losses. Tesla and other technology linked stocks also regained ground as investors stepped back from the sharp selling triggered by concerns over the political push for tighter AI regulation.

The recovery suggested that investors had not abandoned the longer term AI investment theme despite growing volatility.

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“We still think AI is the dominant theme in this bull market,” Keith Lerner, chief investment officer at Truist Advisory Services. "We are still giving technology the benefit of the doubt.”

LPL Financial's chief cross asset strategist Adam Turnquist also described the recent selloff as a possible knee-jerk reaction to the US midterm election results.

“AI has gone on trial several times in this cycle and come away with an innocent verdict,” Turnquist said.

Strong jobs data revive Fed rate concerns

The recovery came alongside stronger than expected US employment data, which reinforced concerns that the Federal Reserve could raise interest rates again in December.

Nonfarm payrolls increased by 165,000 in October, while the unemployment rate fell to 4.1%, indicating continued labour market resilience, Reuters reported. Traders raised the probability of a December rate hike to 78% from 70% earlier, according to LSEG data.

“Those are strong numbers,” said Joe Saluzzi, co-head of equity trading at Themis Trading. However, he questioned whether the Fed would tighten policy amid rising market volatility.

Meanwhile, copper prices remained above their 200 day moving average, offering another indication that demand linked to AI infrastructure had not weakened significantly. Turnquist described the metal as a useful reality check on concerns about an AI investment slowdown, according to Reuters.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)