US stock markets staged a partial rebound on Friday, November 6, after a historic selloff the prior day erased trillions in market value amid concerns over potential Democratic-led restrictions on artificial intelligence (AI) infrastructure and data centers. The tech-heavy Nasdaq Composite rose 1.1% following a 5.5% plunge on Thursday, while the S&P 500 gained 0.31% and the Dow Jones Industrial Average fell 0.46%.
The Nasdaq entered a correction—defined as a drop of at least 10% from its recent peak—after sustained losses over the past month. Investors cited uncertainty surrounding the outcome of this week’s US midterm elections, which saw sweeping Democratic victories at the federal and state levels. The selloff disproportionately impacted companies tied to the AI boom, with the so-called Magnificent Seven technology stocks losing approximately $1 trillion in market value on Thursday alone.
Key Developments on Friday
- The US Bureau of Labor Statistics reported that the economy added 165,000 jobs in October, exceeding analyst expectations. The unemployment rate dipped to 4.1%, reinforcing confidence in economic strength but also raising expectations that the Federal Reserve may proceed with further interest rate hikes.
- Nvidia, a bellwether for the AI sector, rebounded 6.6% after losing more than 9% of its value on Thursday. Other major chipmakers, including AMD, Intel, and Micron Technology, also posted gains ranging from 5% to 11%. Tesla and SpaceX recovered 3% and nearly 9%, respectively, after sharp declines earlier in the week.
- Texas Governor-elect Gina Hinojosa, a Democrat, stated that the state—home to a significant share of US data centers—would introduce new regulations to address concerns over electricity consumption, water usage, and community impact. Hinojosa emphasized a shift toward partnerships that benefit local residents, stating, “We have always been a pro-business state in Texas, but what changes now with me as governor is it has to be a partnership that benefits Texans.”
Market Reactions and Broader Implications
The partial recovery on Friday followed a global market rout that began in the US on Thursday and spread to Asian and European markets. The Philadelphia Semiconductor Index, a key barometer for chip stocks, surged 4.2% after suffering its worst single-day drop since April 2025. Analysts attributed the rebound to a combination of stronger-than-expected jobs data and reduced uncertainty following the election results.
However, the market remains volatile. Gerry Sparrow, president of Sparrow Capital Management, noted that the primary disruption stems from investor uncertainty about the transition from a Republican-led to a Democratic-led government at both the federal and state levels. “The volatility around elections or any political event... is always going to disrupt the market,” Sparrow said.
Policy Shifts and Industry Concerns
The midterm elections highlighted growing opposition to data center expansion, with 41 ballot measures across 10 states addressing restrictions or bans on their development. Voters approved restrictions in all but one of these measures, signaling broader public skepticism toward the industry’s rapid growth. Additionally, an analysis by Newsweek found that members of Congress who supported data centers were more likely to lose their seats compared to colleagues who opposed them.
President Donald Trump reiterated his support for AI and data center development on Friday, stating that only “foolish leadership” would reject their economic benefits. His remarks contrasted with the Democratic focus on regulatory oversight and community protections, underscoring the political divide over the future of AI infrastructure.
Long-Term Outlook
While Friday’s rally provided temporary relief, analysts caution that the market’s trajectory remains uncertain. The Federal Reserve’s next policy moves, the implementation of new state and local regulations, and the pace of AI infrastructure investment will all play critical roles in shaping investor sentiment in the coming weeks. The Nasdaq’s correction status and the broader tech sector’s volatility suggest that the market is still adjusting to the post-election landscape.