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US stocks rose after heavy losses the previous day, chip stocks recovered, but strong employment data boosted expectations of interest rate hikes, and concerns about data center policies still weighed on market sentiment.
US stocks Nasdaq After the index faced fierce selling pressure on the previous trading day and fell into the correction range, investors took advantage of the low price of chip stocks in early trading on the 6th, driving the index higher.
The Nasdaq index, which is loaded with technology stocks, rose 1.8% in early trading, the US stock market’s S&P 500 index rose 0.9%, the Philadelphia Semiconductor index jumped nearly 6%, and TSMC ADRs rose nearly 8%;Dow Jones The industrial index remained under pressure and fell 186 points or 0.4%.
The US added 165,000 non-farm payrolls in October, better than the expected 59,000, and the unemployment rate also fell to 4.1%. Strong employment data raised expectations of a Federal Reserve interest rate hike, pushed US Treasury bond yields higher, and curbed gains in US stocks.
The Democratic Party’s sweeping victories in the House of Representatives, Senate and several key gubernatorial elections gave rise to market concerns that data center construction may slow down, causing a huge blow to US stocks on the 5th.
Heavy selling pressure caused three major US stock indices to post their worst one-day decline overnight since April 2025. The Nasdaq fell 5.5% and closed more than 10% below its latest high, falling into the correction range defined by Wall Street. The S&P 500 index fell 4.4%, and the Dow Jones index fell more than 1,800 points, or 3.4%. All 11 major sectors of the S&P 500 index closed in the black, with companies related to building artificial intelligence (AI) infrastructure suffering the most.
The share price of memory maker Micron Technology rose nearly 10% in early trading, recovering some losses from a 17% decline a day earlier. NVIDIA also rebounded 7% after falling 9% overnight.
“The magnitude of the decline in some of the market’s largest capitalization stocks is shocking. But it also highlights the increasingly serious concentration risk in the U.S. stock market,” Quilter portfolio manager Clark said via email. “A small number of technology and semiconductor stocks now hold a very high weighting in the index. Once these stocks weaken, they will soon drag down the Nasdaq and S&P 500 indexes.”
After the Democratic Party won the election, senior officials continuously called for a ban on the construction of data centers. Gina Hinojosa, the governor-elect of Texas, the center of US data centers, said in an interview with CNN on the evening of the 5th: “We will enact legislation to protect Texas residents. Until relevant safety measures are put into place, we must suspend the current data center construction activities.”
Summary FAQ
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After the Nasdaq fell into correction range a day earlier, investors took advantage of low prices to snap up chip stocks, leading to a surge in technology stocks; TSMC’s ADR also increased by about 8%.
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In October, there were 165,000 new non-agricultural jobs and the unemployment rate fell to 4.1%, much better than expected. As a result, the market increased expectations of an interest rate hike by the Federal Reserve. US Treasury bond yields rose, dampening the rise of US stocks.
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The market is worried that data center construction could slow, as some top Democrats are calling for a ban on expansion, putting AI infrastructure-related technology and semiconductor stocks under more selling pressure.
