Nasdaq Rebounds but Posts Fourth Straight Weekly Decline

US Technology Stocks staged a strong recovery on Friday after suffering their steepest selloff in more than a year. The Nasdaq Composite gained 1.1% during the session as investors returned to semiconductor and artificial intelligence-related stocks. However, the recovery was not enough to prevent the index from recording its fourth consecutive weekly decline.

Investors continued to assess the outlook for artificial intelligence investments, technology valuations and future Federal Reserve interest rate decisions. While Friday’s gains reflected renewed buying interest, concerns about the sustainability of AI-related spending continued to influence market sentiment.

Key Highlights

• The Nasdaq Composite rose 1.1% on Friday but declined 3.4% for the week.
• The S&P 500 gained 0.32% to close at 7,376.86 points.
• The Dow Jones Industrial Average fell 0.46% to 51,285.73 points.
• The semiconductor index rallied 4.2%, with AMD gaining 11% and Nvidia rising 2.8%.
• Stronger-than-expected US employment data increased expectations of a possible Federal Reserve rate hike in December.

Nasdaq Recovers After Heavy Technology Stock Selling

The Nasdaq Composite gained 264 points to close at 24,579.43 points on Friday. The index had risen as much as 2% during the session before giving up some of its intraday gains.

The recovery followed a difficult period for technology stocks, which had faced heavy selling as investors questioned the scale and financial returns of artificial intelligence investments.

Despite Friday’s rebound, the Nasdaq declined 3.4% over the week. The index also entered correction territory, representing a decline of at least 10% from its peak a month earlier.

The weekly performance shows that investors remain cautious even as some buyers returned to technology shares following the sharp selloff.

S&P 500 Rises While Dow Jones Ends Lower

Wall Street‘s major indexes delivered mixed performances on Friday. The S&P 500 and Nasdaq ended higher, while the Dow Jones Industrial Average declined.

The S&P 500 added 23 points, or 0.32%, to finish at 7,376.86. The Dow Jones fell 237 points, or 0.46%, to close at 51,285.73. For the full week, the S&P 500 lost 2.7%, while the Dow declined 0.9%.

The S&P 500 also recorded its worst weekly performance in more than a year, highlighting the broader impact of uncertainty across financial markets.

Semiconductor Stocks Lead Technology Sector Recovery

Semiconductor companies led Friday’s technology sector rebound. The semiconductor index advanced 4.2%, with several major chipmakers recording substantial gains.

• Advanced Micro Devices: Shares climbed 11%.
• Nvidia: The stock gained 2.8%.
• Sandisk: Shares recovered almost 4%.
• Tesla: The stock advanced 4.2%.
• SpaceX: Shares jumped 8.6%.

The recovery was broadly distributed across technology stocks, suggesting that investors were buying into several parts of the sector rather than focusing on a single company.

Keith Lerner, chief investment officer at Truist Advisory Services, said artificial intelligence remained the dominant theme in the current bull market. His comments reflected continued investor confidence in the long-term technology investment cycle despite recent volatility.

AI Investment Concerns Continue to Shape Market Sentiment

Artificial intelligence has been a major driver of US stock market gains, supporting semiconductor manufacturers, technology companies and businesses supplying infrastructure for data centres.

However, investors have recently become more sensitive to the amount of money companies are spending on AI infrastructure and whether those investments will generate sufficient returns.

The latest selling pressure followed a period of market volatility that began with a rise in long-term US Treasury yields in August and intensified during the past month.

Adam Turnquist, chief cross-asset strategist at LPL Financial, described the latest selling as a possible knee-jerk reaction following the US midterm election results. He also noted that AI-related concerns had emerged several times during the current market cycle.

Some market participants viewed the correction as a potential longer-term buying opportunity. However, the continued weekly decline in the Nasdaq indicates that investors have not completely moved past concerns about technology valuations and future AI spending.

Strong US Jobs Data Raises Federal Reserve Rate Concerns

Economic data also influenced investor expectations about the Federal Reserve’s next policy decision. US nonfarm payrolls increased more than expected in October, while the unemployment rate declined to 4.1%.

The figures suggested that the US labour market remained resilient. However, stronger employment conditions also raised questions about whether inflationary pressures could remain elevated and influence the central bank’s interest rate decisions.

According to LSEG data cited in the report, traders increased their expectations of a possible December rate move. The implied probability of a Federal Reserve rate hike rose to 78%, compared with 70% earlier.

Joe Saluzzi, co-head of equity trading at Themis Trading, described the employment figures as strong but questioned whether the Federal Reserve would want to raise interest rates while financial markets were already under pressure.

Higher interest rates can affect stock valuations by increasing borrowing costs and reducing the relative attractiveness of riskier investments. Technology companies, particularly those valued on expectations of future growth, can be sensitive to changes in interest rate expectations.

Atlassian Falls While Airbnb Shares Jump

Individual company developments also contributed to Friday’s market movements. Software company Atlassian saw its shares decline 16% after reporting its first-quarter results.

Airbnb moved in the opposite direction, with shares climbing 12%. The vacation rental platform raised its full-year 2026 revenue growth forecast, encouraging investors to buy the stock.

These contrasting performances showed that company-specific financial results and business outlooks continued to influence stock movements alongside broader market trends.

Lower Oil Prices Support Risk Appetite

Oil prices edged lower on Friday and were on track for significant weekly declines. The softer energy market added some support to sentiment towards riskier assets.

The S&P 500 energy sector fell 12% during the week, marking its worst weekly performance since April 2025.

Lower oil prices can reduce concerns about energy-related inflation and operating costs for businesses. However, the wider impact on financial markets also depends on the reasons behind the decline and the outlook for global demand.

Copper Prices Offer Another Signal for the AI Trade

Despite the weakness in technology stocks, some investors continued to monitor copper prices for clues about the underlying demand for AI infrastructure.

Copper is widely used in data centres and other technology-related infrastructure. Its price performance can therefore provide one indication of demand for materials needed to support large-scale digital investment.

Turnquist noted that copper futures remained above their 200-day moving average and September lows. He argued that a significant collapse in AI-related demand could potentially weaken copper prices as well.

However, copper is not a perfect measure of AI investment activity. Its prices are influenced by several industries and broader global economic conditions, making it only one of several indicators investors can monitor.

Conclusion

Wall Street’s Friday rebound offered some relief to technology investors after a sharp selloff, with the Nasdaq gaining 1.1% and semiconductor stocks leading the recovery. Nvidia, AMD, Sandisk and other technology shares posted gains as investors returned to the sector.

However, the Nasdaq’s fourth consecutive weekly decline and the S&P 500’s steep weekly loss underline the uncertainty surrounding AI investments, interest rates and market valuations. Investors will continue watching corporate earnings, employment data, Federal Reserve signals and infrastructure demand to assess whether the technology-led market rally can regain momentum.