The S&P 500 Index (SPY) rose +0.89% today, while the Dow Jones Industrial Average (DIA) fell -0.42%, and the Nasdaq 100 Index (QQQ) surged +2.12%. December E-mini S&P futures (ESZ26) gained +0.90%, and December E-mini Nasdaq futures (NQZ26) climbed +2.12%. The broader market recovered some of Thursday’s losses, driven by dip buying in chipmakers and AI-infrastructure stocks. However, the Dow Jones Industrials hit a 4-week low, weighed down by weakness in software stocks.
US stock indices saw mixed performance as the market digested the Democratic sweep in Tuesday’s midterm elections, which sparked concerns about increased regulation for the artificial-intelligence industry. The rotation out of chipmakers reflected fears that public opposition to data centers could limit growth for chipmakers and data-center suppliers. The US labor market showed unexpected strength, with October nonfarm payrolls rising by +165,000, surpassing expectations of +70,000. The unemployment rate fell -0.1 to 4.1%, and average hourly earnings rose +0.4% month-over-month and +3.1% year-over-year.
Hawkish comments from New York Fed President John Williams added pressure on stocks and bonds, as he emphasized that inflation remains "absolutely too high" and that monetary policy must ensure price shocks do not lead to persistent inflation. December WTI crude oil prices (CLZ26) rose +0.5% after Ukraine launched a drone attack on Russia’s Yanos refinery, which has a capacity of 300,000 barrels per day. However, crude prices fell back from their highs on signs of progress in US-Iran negotiations to end the war.
Chipmakers and AI-infrastructure stocks led the gains, recovering from Thursday’s declines. The iShares Semiconductor ETF (SOXX) jumped more than +5%, with Advanced Micro Devices (AMD) up more than +13% and Lam Research (LRCX) up more than +11%. Cloud infrastructure stocks also rebounded, with Nebius Group (NBIS) rising more than +11% and Lumentum Holdings (LITE) up more than +8%. Cloudflare (NET) surged +18% after raising its full-year adjusted EPS forecast, while software stocks like Atlassian (TEAM) fell more than -10% on underwhelming future outlooks.