AI Stocks Bounce Back After 5.5% Nasdaq Drop Amid Strong Jobs Report

The Nasdaq Composite opened 1.23% higher on Friday, erasing a large portion of the 5.5% decline it suffered on Thursday. The rebound in technology stocks followed the release of strong US labor data and a statement from President Donald Trump supporting the AI sector.

Investors had pulled back on Thursday after Democrats won control of both houses of Congress in the midterm elections. Many Democratic candidates campaigned on stricter regulations for AI data centers. Fears of new rules drove the sell-off, which spread from US markets to exchanges in Asia and Europe.

Nvidia led the recovery in Friday’s early trading. The chipmaker’s shares rose by more than 6%, recouping some of the hundreds of billions of dollars in market value lost when its stock fell over 9% on Thursday. Tesla shares climbed nearly 3%, while SpaceX stock rose by more than 7%.

President Trump addressed market sentiment on Friday, arguing that only foolish leadership would reject the wealth generated by super intelligence. His comments aimed to reassure investors that the federal government continues to back the development of artificial intelligence.

The US economy added 165,000 jobs in October, more than double what financial experts had anticipated. The unemployment rate dropped to 4.1% from 4.2% in September. The Bureau of Labor Statistics reported that the rate has stayed between 4.1% and 4.3% since March of this year.

Professional and business services drove the largest share of new employment, adding 70,000 positions. Healthcare followed with 42,000 new jobs. Manufacturing and transportation and warehousing also contributed to the total increase.

Neil Birrell, chief investment officer at Premier Miton, noted that the jobs figures are critical indicators despite the dramatic stock movements. He observed that the US economy is currently running hard, suggesting the risks markets are worrying about may not be as threatening to the real economy as initially feared.