Nasdaq Rebounds as Nvidia Jumps. How Much of the AI Rout Has It Won Back?

The Nasdaq Composite bounced 1.73% in early New York trading on Friday, November 6, after sinking 5.5% the day before. Nvidia was up 5.6%, and the index that tracks chip stocks rose 4.6%. At 10:21 a.m. New York time, or 8:51 p.m. in India, the Nasdaq was still 10.4% below its October closing record.

What happened on Wall Street on Friday?

Chip stocks led an early rebound. The Nasdaq was up 1.82% at 9:57 a.m. before easing to 1.73% at 10:21 a.m., according to Reuters. AMD, Intel and Micron were up between 3% and 10.5% in the later report. The S&P 500, a broader measure of large US companies, gained 1%. The Dow was almost flat.

How much of Thursday’s fall did the Nasdaq recover?

About 30% by that point. The index closed at 25,736.51 on Wednesday, sank to 24,315 on Thursday and climbed to 24,736.20 on Friday morning. It won back 421 of the roughly 1,422 points it had lost. It was still 3.9% below Wednesday’s close. A correction usually means a drop of at least 10% from a recent peak.

Why doesn’t a 5.6% rise undo Nvidia’s fall?

Friday’s gain started from a lower price. Nvidia closed at $200.13 on Wednesday and $181.60 on Thursday, a drop of 9.26%. A 5.6% gain from $181.60 takes it to about $191.77. It would have needed to rise 10.2% from Thursday’s close to get back to Wednesday’s price.

Why can chip stocks move the Nasdaq so much?

The Nasdaq Composite tracks thousands of stocks listed on the Nasdaq exchange, and companies with bigger stock market values carry more weight. A jump in Nvidia and several other big technology shares can pull the index up even while some smaller stocks fall. The PHLX Semiconductor Sector Index tracks a narrower group of chip companies, so it gives a closer look at the industry.

What set off the sell-off in the first place?

Investors worried that the US midterm results could slow construction of the data centres that run AI systems. That matters to chipmakers because those facilities buy processors, memory and networking equipment. If a project’s approval or power connection slips, the operator may push back equipment orders. Reuters also reported that investors were already questioning the scale and financing of AI spending.

Has the election already changed what can be built?

In Texas, the election could prolong a pause already in place. Republican Governor Greg Abbott had directed the state’s environmental regulator to hold up data-centre permits pending information on power and water. Democrat Gina Hinojosa, the governor-elect, campaigned for a moratorium on new approvals. Her proposal gives investors a reason to reassess project timelines.

Why did good US jobs numbers revive rate-hike fears?

The US added 165,000 jobs outside farming in October, and unemployment was 4.1%. The Federal Reserve had held its policy rate at 3.75% to 4% on October 28, with two officials favouring a rise. When hiring holds up, the Fed has more room to focus on inflation. Reuters reported that Friday’s jobs figures strengthened market bets on a December increase.

Why do higher rates matter so much to AI stocks?

They can raise financing costs for new data centres. They also change what investors will pay today for profits they expect years from now. Suppose an investor expects $100 in five years. At a 4% annual return, that is worth about $82 today. At 5%, it is worth about $78. The promised $100 stays the same.

How can chips rally while rate fears rise?

Investors can reassess the price of a stock faster than a company can build a data centre. A sharp fall leaves room for buyers who think prices have dropped further than the business outlook warrants. One reason the debate remains open is that Nvidia reported $89 billion in data-centre revenue in its quarter to July, up 117% from a year earlier. Friday’s price rise tells us little about how its customers’ orders have changed since then.

Why did India go its own way?

The Nifty 50 gained 2.01% and the Sensex 2.17% on Friday, before the US market opened. Reuters reported that easing oil prices over the week and a surge in foreign buying helped Indian shares, with financial stocks leading the week’s gains. Foreign institutions bought roughly ₹15,000 crore of Indian shares on Thursday, according to provisional exchange data cited by Reuters.

When will we know more about rates and chip demand?

US consumer inflation figures arrive on November 10 and could change expectations for the Fed. Nvidia reports on November 17 in the US, when investors can compare the company’s sales outlook with what they feared during the sell-off. The Fed meets on December 8–9. Those dates give the market something firmer to work with than a Friday morning price swing.