After the S&P 500 index recorded its largest one-day decline in over a year, the selling pressure on U.S. stock markets eased temporarily on Friday. Buying activity at lower levels began to enter the market, providing support for stocks related to artificial intelligence that had previously suffered heavy losses. However, other markets remained volatile, with European stocks continuing the sharp decline seen in Asian markets. The focus of the market on this trading day was on the U.S. non-farm payroll report.

As of press time, the Dow Jones futures fell by 0.99%, the S&P 500 index futures rose by 0.31%, and the Nasdaq futures rose by 1.62%.

On Friday, U.S. stock index futures rose by 0.4%. Nasdaq 100 index futures increased by 1.4%, indicating that the index is expected to recover some of the 6.4% decline seen on Thursday. Previously, due to market concerns that the data center industry might face stricter regulation, the S&P 500 index lost about $3 trillion in market value on the previous trading day.

Selling off assets is somewhat like a disaster.

However, market turmoil continues to ferment in other regions. The Stoxx 600 index in Europe fell by 1.2%, and Asian stock market benchmarks tumbled by nearly 4%. Japan's Nikkei 225 index plummeted by 6%, recording the largest single-day decline since April 2025. Major stock indices in South Korea and Taiwan also tumbled by more than 8% at the opening, but the declines narrowed later as relevant authorities took emergency measures to curb selling pressure.

Yingtou Securities' chief strategist, Steve Sosnick, stated: "After experiencing such a severe shock, it is difficult to believe that the market will be able to rebound directly from the current level."

He added, "In the short term, the market may have been over-sold, but the underlying issues and fundamental reasons that led to this round of decline are not likely to disappear so easily."

CMC Markets, the head of Asia and Middle East operations, Christopher Forbes said: "This is actually a bit like a disaster."

He said, "Previously, customers generally took long positions on stock indices and individual stocks, only to suffer heavy losses as a result. Throughout the night and all day long, we continuously received notifications from customers requesting additional margin payments and complaints... Because this involves very strong emotions, right? People tend to be stubborn about the stocks they hold and their judgments regarding a particular stock or outcome, yet you have to tell them: 'Look, you have already lost money.'"

Opportunistic buyers buy on dips.

This week, global financial markets experienced severe turmoil. Initially, investors bet that the Democrats would sweep both houses of Congress in the U.S. midterms, which could lead to a quicker end to the Iran war. However, concerns about the potential strengthening of regulations on data center construction in the U.S. quickly overshadowed this earlier optimism. Chip manufacturers were hit hard by these sell-offs, with one of the major U.S. chip stock indices plummeting by nearly 16% since Monday.

In pre-market trading on Friday, an exchange-traded fund (ETF) that tracks the U.S. chip sector (ETF) rebounded by 4.5%. NVIDIA's stock price rose by more than 4%, however, large tech stocks such as Amazon and Apple still faced pressure. Meanwhile, data center company (IREN Ltd) saw its stock price soar 18% after announcing a significant increase in cloud business revenue (AI).

The Roberto Scholte of Singular Bank indicates: 'I expect a mild rebound in the market today, as opportunistic buyers are buying into some of the stocks that have fallen the most.' He pointed out: 'Investors will be looking for clues regarding the policy intentions of the Democratic Party. If there are credible signals indicating that the nationwide suspension of data center construction will not be implemented, it could help to reverse market sentiment.'

For many market participants, the most critical question at present is: Does this sharp decline signify that the stock market is about to enter a deeper correction, or is it merely a temporary adjustment?

Texas' newly elected governor, Gina Inohosa ( Gina Hinojosa ), stated on Thursday that the state will enact laws to protect residents from the negative impacts of data center construction, with a particular emphasis on the effects of such projects on rural communities.

The market is very close to the final stage of panic selling.

However, some analysts believe that the recent market sell-off may have been excessive, and the stock market might not be far from a temporary bottom.

CaixaBank of the asset management company stated, "The market performance on Thursday is already very close to the final stage of panic selling." He added, "It may still be too early to determine that the market has hit bottom, but a large amount of risk has been released, and currently, the fundamentals of companies have not confirmed the market's most pessimistic concerns about AI."

Mega Financial Holding, Vice President of the Stock Trading Department, stated: "Today, we are bound to see more financing accounts undergo forced liquidation, which indicates that the market may have entered the final stage of panic selling."

He added, "Even TSMC once hit the daily limit down, which is usually a sign that the market downturn is coming to an end. When even TSMC is being sold off, it means that almost all stocks have been completely sold."

Hedge funds are under pressure

At the same time, political uncertainties are impacting the AI transactions, which are already fragile due to doubts about the return prospects of massive AI infrastructure investments. This market crash has triggered additional margin requirements, which have not only panicked retail investors but also affected hedge funds.

After experiencing its worst single-month performance since March 2020, Walleye Capital is returning funds to some investors. The macro hedge fund Kirkoswald Asset Management managed by Greg Coffey (Greg Coffey) recorded the most severe single-month decline in its history. Arini Capital Management, one of the fastest-growing hedge funds in Europe and focused on credit investment, lost more than 12% just last month.

The chairman of asset management company Lingtong Shengtai, Dong Baozhen, stated: "This round of selling indicates that the price of AI shares was previously based on overly optimistic fantasies about the future, and now those fantasies have shattered."

He stated, "The U.S. stock market has always been the standard-bearer and pillar of the global AI bull market. Now that this pillar has broken, can the AI bull markets in other markets still sustain themselves on their own?"

The market is waiting for the non-farm payroll data.

Before the release of the U.S. monthly non-farm payroll report on Friday, the upward trend in U.S. Treasury yields, which was previously driven by safe-haven demand, temporarily came to a halt. The yield on the 10-year U.S. Treasury bond, an important benchmark in the global bond market, stood at 4.838%, hovering near its lowest level since September 9. The yield on Japan's 10-year Treasury bond once dropped by 9 basis points to 1.795%, reaching its lowest level since June 30.

Masahiko Loo, the chief fixed-income strategist at Tofu Investment Management Company, stated: "Bonds are increasingly playing their traditional role again. As fixed income becomes the main source of returns, the traditional risk-diversifying function of bond portfolios is also being restored."

He summarized, "This seems more like the market is re-evaluating the policy risks of AI, rather than re-evaluating the entire AI industry cycle."

The US dollar strengthened against all major currencies, while the price of Brent crude oil fell to around $97 per barrel.

In terms of economic data, investors will closely monitor the monthly employment report to be released by the United States in order to find more clues about the future interest rate policy path of the Federal Reserve.

Bloomberg Economics predicts that non-farm employment in the United States will increase moderately by 26,000 people, and the unemployment rate is likely to remain around 4.2%. Bloomberg economists, including Anna Wong, pointed out in their research report that neither employment growth nor unemployment rate data is sufficient to prevent the Federal Reserve from raising interest rates in December along its established path.

Santander Asset Management's Francisco Simon states: 'A strong employment report could help boost market confidence in the economic cycle, thereby alleviating some of the current tensions. However, in the short term, the market's focus may still be on the artificial intelligence and data center industries.' He added, 'We still believe that there is room for further expansion in cyclical employment, supported by corporate profits and investment activities.'

Approximately 40% of the planned data center capacity in the United States is located in states that are considering suspending construction.

Data from market intelligence firm Cleanview shows that approximately 40% of the planned data center capacity to be built in the United States is set to be located in the aforementioned states.

In addition, according to statistics, 46 local referendum measures have been passed or are expected to be passed, and these measures will also hinder the development of data centers. At least 17 of them directly prohibit the construction of large data centers.

Focus on Individual Stocks

Moderna, a vaccine company, saw its stock price soar by nearly 10%. The company released its third-quarter financial report and raised its annual sales growth forecast. Moderna currently expects its revenue growth in 2026 to be between 15% and 25%, whereas its previous guidance was only up to 10%.

Chip device manufacturer Fanlin Group's stock price soared by nearly 11%, and the company's board of directors approved a $25 billion stock repurchase plan.

Cloud call center service provider Five9 tumbles more than 17% so far. Five9 releases third-quarter 2026 performance guidance and announces the acquisition of Level AI for $325 million in cash.

Credit service provider Affirm declines by 4% after purchase with payment due later. Affirm releases its quarterly earnings, with the forecasted results exceeding market expectations. The company also raised its annual total commodity transaction volume (GMV) forecast, but concerns about credit risks continue to suppress the stock price.

Taser gun manufacturer Axon sees its stock price fall by nearly 9%. The company's earnings per share and revenue in the third quarter fell short of Wall Street's expectations, and its fourth-quarter performance forecast is weak; in addition, the company has committed to making an additional investment of $1.2 billion in drone manufacturer Skydio, increasing its stake to approximately 37%.

Artificial intelligence and chip stocks, including Micron, Western Data, Marvell, Supermicro Chips, Nebius, and Cirrus Logic, saw gains before the market opened on Friday. Previously, there were concerns in the market that the expansion of AI data centers might face restrictions, which led to a significant sell-off of related stocks on Thursday. This time, stock prices have rebounded for recovery.

Cloudflare is up 19% so far, and its performance guidance for this quarter exceeds market expectations. Cloudflare expects adjusted earnings per share to be $0.43, while FactSet analysts unanimously predict $0.38; revenue is expected to be $845-846 million, higher than analysts' forecast of $796 million.

The new cloud service provider Iren has seen a surge of nearly 19% so far, with quarterly revenue reaching 228 million US dollars, compared to 137 million US dollars in the previous quarter. The payment of over 4 billion US dollars that was originally expected to be received in 2026 has now been postponed to January 2027 and beyond. During this round of sharp declines in AI concept stocks, Iren has suffered heavy losses, with a cumulative decline of 31% over the past week.

Online accommodation platform Airbnb has seen a significant increase of 13%. LSEG data shows that the company's earnings per share in the third quarter were $3.16, higher than the analysts' consensus expectation of $2.85; revenue was $4.87 billion, exceeding the market's expectation of $4.75 billion.

Atlassian Stock Price Plunges by Over 18%. This team collaboration efficiency software vendor disclosed that in the second fiscal quarter ending December, the year-over-year growth of data center business revenue is expected to decline by about 14%; for the entire fiscal year ending next June, the growth rate of this business is expected to decline by 16%.

Software company JFrog surges 23% so far, and the company has raised its full-year performance forecast. JFrog expects adjusted earnings per share of $1.14-$1.16 and revenue of $680-$682 million, which is significantly better than FactSet's consensus forecast of $0.98 per share and revenue of $651.9 million.

Online sports betting platform DraftKings tumbles by over 20% so far. DraftKings reported a loss of $0.94 per share in the third quarter, which is higher than the $0.39 expected by analysts from LSEG; revenue was $1.33 billion, falling short of the expected $1.4 billion; the sports betting segment generated $784 million in revenue, which is lower than the $811.8 million consistently predicted by StreetAccount.

Ride-hailing company Lufuche's stock price has fallen by more than 5%. In the third quarter, its revenue was $1.82 billion, lower than the $1.92 billion expected by analysts; for the fourth quarter, the order transaction volume forecast is $5.74-$5.94 billion, compared to the market expectation of $5.81 billion.