Nasdaq rebounds as chip stocks recover, but Fed hike bets rise after jobs report

what happened

The Nasdaq Composite climbed on Friday as chip stocks recovered part of Thursday's slump, when the index posted its steepest one-day decline in 19 months and entered correction territory. According to Reuters, investors had worried that a Democratic-led Congress after the midterm elections could bring tougher AI regulation and slow the buildout of data centers. Nvidia added 3.8%, while the semiconductor index rose 4.2% after falling more than 12% the day before.

October payrolls rose more than expected and the unemployment rate dropped to 4.1%. Traders raised their odds of a Fed rate hike as soon as December to 78%, up from 70% earlier. The S&P 500 gained about 1%, while Brent crude edged lower on Friday and the S&P 500 energy index was on track for a weekly drop of more than 11%.

why it matters

The market is getting two signals at once: the tech rebound supports risk appetite, but expectations of tighter monetary policy weigh on growth stocks and push bond yields higher. The CBOE Volatility Index eased slightly to 23.88, Reuters said, after its biggest jump in about 19 months the day before. Investors will watch whether stocks can hold gains after four straight weekly declines and how Fed rate expectations respond to the next economic data.

market impact

US growth stocks: chip rebound supports the Nasdaq, but higher Fed rate hike bets pressure the sector

• ↔Nasdaq Composite mixed — chip rebound supports the index while expectations of a Fed rate hike weigh on growth stocks

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