Nasdaq recovers 1.1% after 5.5% AI-driven slump as Asian markets fall

A sharp sell-off on Thursday

On Thursday, 5 November, technology shares on Wall Street fell hard and the Nasdaq dropped 5.5 percent, its steepest loss since April 2025. Investors feared that the Democrats, who won the US midterm elections, would tighten rules for the AI sector and curb spending on data centres. Companies on the Nasdaq lost more than 2,500 billion dollars in market value that day, and the seven largest US tech firms, known as the Magnificent Seven, shed more than 1,000 billion dollars together. Nvidia took the heaviest hit, losing more than 440 billion dollars in a single session. Tesla fell almost 11 percent, and Elon Musk, a large donor to the Republicans, saw more than 100 billion dollars of his fortune disappear.

A partial rebound on Friday

On Friday, 6 November, the Nasdaq gained 1.1 percent, the S&P 500 added 0.3 percent, and the Dow Jones Industrial Average closed 0.5 percent lower. Chip stocks led the bounce, with ASML up 2.7 percent after an 8 percent loss on Thursday, while ASMI and Besi rose 2.4 and 1.8 percent. Micron, Sandisk, Marvell, AMD, Nebius and CoreWeave climbed as much as 11 percent after heavy selling the day before. Tesla rose 4 percent and SpaceX almost 9 percent, while Musk said Tesla will stop producing the Cybertruck at its large Texas factory next year. Airbnb gained almost 12 percent after quarterly results released late on Thursday showed revenue up 19 percent to 4.9 billion dollars, and Moderna added 7 percent.

2026-11-05-5.5%

2026-11-061.1%

2026-11-05

-5.5 %

2026-11-06

1.1 %

Data from the article text

Amsterdam and Asia

The AEX closed 0.8 percent lower on Friday at 1,120.55 points, weighed down by Universal Music Group (down 3.9 percent) and DSM-Firmenich (down 3.1 percent). Philips was the biggest gainer in the AEX over the week with a 12 percent rise, after better-than-expected quarterly figures and an agreement in principle with US justice authorities that settles a large part of its legal problems. Shell fell 8 percent over the week as oil prices slid, and Brent crude dropped below 100 dollars a barrel earlier in the week for the first time since September. In Tokyo the Nikkei closed just under 6 percent lower, more than 20 percent below its June high. In Seoul the Kospi lost 6 percent, and trading was briefly halted after an 8 percent drop, while Samsung and SK Hynix fell up to 9 percent. Finance Minister Lee Hyoung-il said the country's economic fundamentals are solid and that the government is ready to take extra measures if volatility rises further.

Jobs data and the Fed

US labour market figures published on Friday beat expectations, with 165,000 jobs added in October against an average economist forecast of 59,000. Unemployment fell from 4.2 percent to 4.1 percent. Erik Kuipers of ING Investment Management said the strength of the labour market also raises the risk that the Federal Reserve has to lift interest rates further to keep inflation under control.

“A strong labour market confirms that the US economy keeps performing well.”

What comes next

Analysts remain divided on whether the sell-off went too far. Citi Bank wrote that risks linked to Iran and AI will likely remain, but that investors have cut their exposure enough for prices to rise. Ludovic Subra, head of investments at Allianz, said the midterm result has ended the idea that the AI sector has free rein, and that markets are learning that boundless optimism is no valuation method. Several new Democratic governors, including the one in Texas, have announced limits on data centre development, which requires very large amounts of energy. Anthropic, maker of the Claude chatbot, plans to list on the Nasdaq later this year, while OpenAI is expected to follow next year.