What moved
Wall Street's last word was a rout. Thursday's session ended with the S&P 500 down 4.36% at 7,353.73, the Nasdaq Composite down 5.52% at 24,315 and the Dow down 3.44% at 51,523.06, leaving the Nasdaq 12.29% below its 52-week high. Futures are the only live US read, and at 08:45 ET S&P 500 futures were up 0.09% and Nasdaq 100 futures up 1.28%.
Asia closed sharply lower, with the Kospi down 6.02%, the Nikkei down 5.96% and Taiwan down 4.51%; the Hang Seng lost a milder 1.27%. Europe has found no floor: the DAX is trading down 2.35%, the FTSE 100 down 1.96%, the CAC 40 down 1.60% and the Euro Stoxx 50 down 1.43%. The DAX reached 26,034.70 earlier in the session and has since slipped back to 25,705.64.
Why
The sell-off began as a chip story and became a political one. Qualcomm and Arm results on Wednesday night were taken as mixed, while Democrats' stronger-than-expected midterm wins raised the prospect of curbs on AI data-centre construction. Micron lost 17.46%, AMD 17.26% and Sandisk 22.26%. Some strategists also see hedge funds locking in gains rather than any sudden change in fundamentals, which is plausible but hard to prove. Company results were not the broad problem: AppLovin rose 31.04% the same day after revenue grew 55%.
The damage then travelled. Tokyo, Seoul and Taipei led the tech rout, and the Kospi triggered a trading halt. Europe has less AI exposure, which helps explain its smaller fall, but rates are an issue there too: the Bank of England raised to 4% on Thursday and warned that another rise could be needed if the US-Iran conflict persists.
This morning's payrolls complicate the rebound. Strong data normally supports profits, but here it also strengthens the case for a Fed hike, and higher yields reduce the present value of distant earnings, which matters most for growth stocks. The 10-year yield is up 3.1 basis points at 4.868% and the 5-year up 3.9 basis points at 4.647%. S&P futures pared gains after the release, and Dow futures are lower, a split with no clean explanation.
Sentiment & risk appetite
Fear has eased only slightly. The VIX is at 26.96 against Thursday's 28.18 close, and the MOVE index of bond volatility ended Thursday up 4.31% at 97.92. Our breadth count shows the selling went well beyond tech: 1,031 US advancers against 5,139 decliners on Thursday, and 2,204 against 10,427 across Asia today. Sector dispersion still points at AI, with US technology down 8.0% and communication services down just 0.59%. The havens are split: the dollar index is up 0.65% at 102.21, within 0.72% of its 52-week high, while gold has fallen 1.36% to $4,057.40, as a firmer dollar and higher yields make a metal that pays no income less attractive.
Economic calendar
US payrolls, released at 08:30 ET today, rose 165,000 in October against 65,000 expected, and unemployment was 4.1% against a 4.2% forecast. Average hourly earnings rose 0.4% on the month and 3.1% on the year, and August and September were revised up by a combined 84,000. Before the release, markets priced a 67% chance of a quarter-point Fed hike at the 9 December decision; the report supports that view.
The University of Michigan's preliminary November sentiment reading follows at 10:00 ET (47.3 expected, 48 prior), and Fed Governor Bowman speaks at 12:15 ET.
Earnings
Moderna posted earnings of 38 cents a share against an expected $1.10 loss, lifted its full-year growth outlook to 15–25% from up to 10% on overseas COVID vaccine sales, and rebounded in pre-market trading. Humana's adjusted loss of 70 cents beat the expected $1.03 loss, and it raised its full-year adjusted EPS guidance to at least $9.50 from at least $9.00. Vistra raised the midpoint of its 2026 EBITDA range and authorised a further $1.5 billion of buybacks.