Wall Street is looking for a recovery on Friday after a brutal sell-off wiped out more than $1 trillion in market value from the so-called Magnificent Seven technology stocks, raising fresh questions about the sustainability of the artificial intelligence (AI) boom.
US stock futures were mixed in early trade, but Nasdaq-100 futures pointed to a potential rebound, trading 1.7% higher. S&P 500 futures rose 0.54%, while Dow Jones futures were down 0.6%. In Europe, the Stoxx 600 technology index was last up 0.44%, with chipmakers ASML and ASMI gaining around 4% and 3%, respectively.
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The recovery signals came after Thursday's sharp sell-off, when investors dumped technology stocks amid concerns that political developments in the US could slow the expansion of data centres and curb spending on AI infrastructure.
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The Nasdaq Composite plunged 5.52% to close at 24,315, slipping more than 10% below its October record and entering correction territory. The index recorded its steepest single-day decline since April 2025, when US President Donald Trump announced sweeping global tariffs.
The S&P 500 fell 4.36% to 7,353.73, while the Dow Jones Industrial Average dropped 1,833 points, or 3.44%, to settle at 51,523.06. All 11 sectors of the S&P 500 ended the session in the red.
The Magnificent Seven, Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta Platforms and Tesla, collectively lost more than $1 trillion in market capitalisation. Nvidia alone shed over $440 billion as its shares declined around 9%.
Tesla was the worst performer among the group, falling 10.8%. Micron Technology and Advanced Micro Devices (AMD) also plunged around 17% each, while Broadcom dropped 10%.
The sell-off followed concerns that Democratic gains in the US midterm elections could bring tighter restrictions on data centre construction, potentially slowing the country's AI infrastructure expansion.
Investors initially welcomed the possibility of restrictions, expecting technology companies to reduce capital expenditure and improve profitability. However, sentiment reversed on Thursday as markets began pricing in the possibility that tighter regulations could hurt the wider AI ecosystem.
Companies have committed billions of dollars to chips, data centres and supporting infrastructure. Any slowdown in these investments could affect semiconductor manufacturers and other businesses that have benefited from the AI spending boom.
Rising borrowing costs have added another layer of concern, given the enormous capital required to build and operate data centres.
Investors will also be watching the October US jobs report, which could influence expectations around the Federal Reserve's interest-rate outlook.
Economists polled by Dow Jones expect the US economy to have added 59,000 jobs in October, while the unemployment rate is projected to remain unchanged at 4.2%.
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Meanwhile, global markets remain under pressure. South Korea's Kospi plunged more than 6% on Friday, while Japan's Nikkei 225 fell 5.9%, entering bear market territory.
Whether Friday's gains in Nasdaq futures translate into a sustained recovery will depend on investors' appetite for technology stocks and their assessment of the risks surrounding AI investments.
For now, the bigger question facing Wall Street is whether Thursday's rout was a temporary shakeout or the beginning of a deeper reassessment of the AI trade.
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