Futures Pointing To Mixed Open Following Yesterday’s Sell-Off

The major U.S. index futures are currently pointing to a mixed open on Friday, with the major averages likely to move in opposite directions following yesterday’s sell-off.

While the tech-heavy Nasdaq 100 futures are jumping by 1.3 percent, the Dow futures are slumping by 1 percent.

Technology stocks may benefit from bargain hunting following yesterday’s nosedive, which dragged the Nasdaq down to its lowest closing level in over six months.

Overall buying interest may be somewhat subdued, however, as traders express continued concerns about the outlook for the AI trade and the impact of Tuesday’s midterm elections.

The major index futures remained starkly mixed following the release of a closely watched Labor Department report showing much stronger-than-expected job growth in the month of October.

The Labor Department said non-farm payroll employment jumped by 165,000 jobs in October after rising by an upwardly revised 60,000 jobs in September.

Economists had expected employment to climb by 62,000 jobs compared to the increase of 29,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.1 percent in October from 4.2 percent in September. The unemployment rate was expected to remain unchanged.

Following the rally seen during Wednesday’s session, stocks showed a substantial move back to the downside during trading on Thursday. The major averages all moved sharply lower, more than offsetting yesterday’s gains.

The major averages ended the day just off their lows of the session. The Nasdaq nosedive 1,421.52 points or 5.5 percent to 24,315.00, the S&P 500 plummeted 334.89 points or 4.4 percent to 7,353.73 and the Dow plunged 1,833.06 or 3.4 percent to 51,523.06.

The sharp pullback on Wall Street came amid a renewed sell-off in the tech sector, with the tech-heavy Nasdaq plummeting into contraction territory and hitting its lowest closing level in over six months.

Lingering concerns about the sustainability of the artificial intelligence trade continued to weigh on the tech sector.

Following Democrats’ takeover of both houses of Congress in Tuesday’s midterm elections, some traders are worried about the possibility of tighter AI regulation.

“Despite yesterday’s relief rally on Wall Street, investors remain cautious about elevated technology valuations and whether substantial AI spending can generate sufficient returns,” said Daniela Hathorn, Senior Market Analyst at Capital.com.

Semiconductor stocks showed a particularly steep drop on the day, resulting in a 12.3 percent nosedive by the Philadelphia Semiconductor Index. The index tumbled to a nearly seven-month closing low.

Considerable was is also visible among computer hardware stocks, as reflected by the 10 percent plunge by the NYSE Arca Computer Hardware Index.

Outside of the tech sector, financial stocks are also seeing significant weakness, with the NYSE Arca Broker/Dealer Index tumbling by 4.3 percent and the KBW Bank Index slumping by 3.6 percent.

Transportation, energy and healthcare stocks also showed notable moves back to the downside, while gold stocks were among the few groups to buck the downtrend.

In U.S. economic news, the Labor Department released a report on Thursday showing an unexpected decline in first-time claims for U.S. unemployment benefits in the week ended October 31st.

The Labor Department said initial jobless claims fell to 189,000, a decrease of 6,000 from the previous week’s revised level of 195,000.

Economists had expected jobless claims to inch up to 196,000 from the 194,000 originally reported for the previous week.

With the unexpected dip, jobless claims matched the multi-decade low of 189,000 set in the week ended July 18th.

On Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of October.

Commodity, Currency Markets

Crude oil futures are rising $0.52 to $91.04 a barrel after surging $2.40 to $90.52 a barrel on Thursday. Meanwhile, after climbing $40.50 to $4,113.50 an ounce in the previous session, gold futures are slumping $53.50 to $4,060 an ounce.

On the currency front, the U.S. dollar is trading at 158.45 yen versus the 157.66 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is trading at $1.1145 compared to yesterday’s $1.12.18.

Asia

Asian stocks retreated on Friday after a Wall Street rout wiped out roughly $2.5 trillion in market value and sent the Nasdaq into correction territory overnight.

Shares of companies exposed to AI data centers, including crucial chipmakers and semiconductor manufacturers came under significant selling pressure amid concerns over valuations and whether substantial AI spending can generate sufficient returns.

Rate hike worries also weighed on markets after two Federal Reserve officials supported modest and steady interest rate increases.

The U.S. dollar held firm against major currencies, while gold traded lower near $4,050 an ounce as traders awaited the all-important U.S. October payrolls report later in the day for more clues on a possible rate hike in December.

Brent crude futures were little changed near $99 a barrel but were on track for a weekly loss of about 11 percent on hopes of de-escalation in the U.S.-Iran conflict and a possible reopening of the Strait of Hormuz.

China’s Shanghai Composite Index closed 1.1 percent lower at 3,649.18 on worries about the durability of the artificial intelligence boom. Hong Kong’s Hang Seng Index slumped 1.3 percent to 24,481.86.

Japanese markets plummeted, dragged down by technology and AI-linked stocks on concerns over tighter regulations in the United States.

The Nikkei 225 Index nosedived 6 percent to 57,434.77, falling below the 60,000-mark for the first time since May and entering bear market territory after a more than 20 percent plunge from its June peak.

The broader Topix Index settled 5.9 percent lower at 3,707.99. Advantest, Tokyo Electron, Kioxia Holdings and SofBank Group slumped 5-11 percent on apprehensions over the pace of future AI infrastructure development and capital spending.

Panasonic and Hitachi both fell around 5 percent on growing uncertainty over the economic and political outlook.

Seoul stocks nosedived to hit a nine-month low, reflecting a significant sell-off in technology and semiconductor shares.

Samsung Electronics, SK Hynix and SK Square slumped 6-10 percent on fresh uncertainty over policies on AI and data centers following a sweeping victory for the Democratic Party in the U.S. midterm elections.

The Kospi Index plunged 6.0 percent to 5,059.69. A circuit breaker was activated by the Korea Exchange to halt trading temporarily after the Index fell more than 8 percent in early trading.

After an emergency meeting of senior officials, Finance Minister Lee Hyoung-il stressed that the country’s economic fundamentals are solid and authorities are ready to unveil more steps to ease the bourse turmoil.

Australian markets closed lower as AI regulation fears weighed on the mining and tech sectors. The benchmark S&P/ASX 200 Index dropped 0.5 percent to 9,020.80 while the broader All Ordinaries Index ended down 0.7 percent at 9,144.70.

Macquarie Group shares tumbled 3.7 percent despite the investment bank posting record first-half profit.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index fell 0.7 percent to 13,998.50 after the release of weak housing data and amid U.S. data center woes.

Europe

European shares have fallen sharply sharply on Friday as the Democratic Party’s sweeping wins in this week’s midterm elections in the U.S. sparked fears of a slowdown in the pace of AI infrastructure development.

SoftBank Group’s five-year credit default swap spread climbed to a four-year high, reflecting growing concerns over the profitability of artificial intelligence investments.

Investors also digested weak data that showed German industrial output expanded 0.7 percent on a monthly basis in September, slower than the revised 1.0 percent rebound in August.

On a yearly basis, industrial production rose 0.4 percent in September, slower than the 0.7 percent increase in the prior month.

The German DAX Index is down by 2.2 percent, the U.K.’s FTSE 100 Index is down by 1.9 percent and the French CAC 40 Index is down by 1.6 percent.

German wind turbine maker Nordex dropped 1.1 percent despite reporting strong performance for Q3 and confirming an increase to its full-year 2026 EBITDA margin guidance.

Krones, a packaging and bottling machine manufacturer, gained 1 percent after order intake rose 2.9 percent in the first three quarters.

Engine maker Deutz tumbled 4 percent after Q3 net income missed estimates.

Spanish travel tech firm Amadeus IT Group rose nearly 2 percent after Q3 earnings matched expectations.

British Airways owner IAG rose about 1 percent after reporting 5 percent growth in third-quarter revenue.

Teleperformance shares plummeted 16 percent in Paris after the outsourcing company cut its full-year revenue growth outlook.

Franco-Dutch airline group Air France-KLM surged nearly 4 percent after announcing the Court of Justice of the European Union has issued a favorable ruling, setting aside the General Court’s February 2024 judgment.

Italian banking group Banco BPM fell 2.3 percent after announcing it is willing to consider a merger with Credit Agricole Italia.

U.S. Economic News

A closely watched report released by the Labor Department on Friday showed employment in the U.S. increased by far more than anticipated in the month of October.

The Labor Department said non-farm payroll employment jumped by 165,000 jobs in October after rising by an upwardly revised 60,000 jobs in September.

Economists had expected employment to climb by 62,000 jobs compared to the increase of 29,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.1 percent in October from 4.2 percent in September. The unemployment rate was expected to remain unchanged.

At 9:10 am ET, St. Louis Federal Reserve President Alberto Musalem is due to speak on “The Important Role Federal Reserve Banks Play in an Independent Central Bank” in a conversation hosted by Greater St. Louis, Inc.

The University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of November at 10 am ET. The consumer sentiment index is expected to come in unchanged in November after edging down to 48.0 in October.

At 12:15 pm ET, Federal Reserve Vice Chair for Supervision Michelle Bowman is due to participates in a discussion on “Supervision and Regulation” at the University of Mississippi Banking and Finance Symposium.

The Federal Reserve is scheduled to release its report on consumer credit in the month of September at 3 pm ET. Consumer credit is expected to increase by $11.5 billion in September.