Taiwan short-selling curbs spark Asian chip rebound as Nvidia probe weighs

• Asia led the overnight bounce. Taiwan's weighted index closed 4.94% higher and the Nikkei 225 finished up 2.33% at 58,775.5. Both are still well below their 52-week highs, by 16.6% and 19.3%. South Korea's Kospi went the other way and ended 0.81% lower. The Hang Seng is trading flat, up 0.05%, and the Shanghai Composite is up 0.32% late in its session.
• Wall Street ended Friday split. The Nasdaq closed 1.09% higher, the S&P 500 rose 0.31% to 7,376.86 and the Dow fell 0.46%. US cash markets are shut, so futures are the only live read on today: S&P 500 futures are up 0.16% and Nasdaq 100 futures are down 0.30%.
• Europe finished Friday sharply lower. The DAX fell 1.92%, the FTSE 100 lost 1.01% to 10,673.94, the Euro Stoxx 50 fell 0.98% and the CAC 40 dropped 0.81%.

Taiwan's regulators drove the night. After Friday's close the Financial Supervisory Commission limited intraday short sales in any stock to 3% of its average daily volume. It also raised the minimum short-selling margin to 130% from 90%, and the finance ministry put its NT$500bn stabilisation fund on standby. Short sellers profit when prices fall, so restricting them removes a source of selling. Chipmakers led the rise, with TSMC, around 40% of the index, at the front. Japan shared in the relief. Both markets had fallen into bear-market territory last week on doubts about AI profitability and Thursday's heavy US tech sell-off, which was linked to fears that Democratic midterm gains could bring tighter rules for AI and data centres.

Nvidia is holding the rebound back. On Sunday its board opened an independent investigation into reports in the FT and New York Times that chief executive Jensen Huang was targeted by a foreign intelligence effort. The board said it had no reason to believe company secrets or US national security had been compromised. Three Republican House committee chairs want Huang at a closed-door hearing as early as 18 November, the day after Nvidia reports results. That is the likeliest reason Nasdaq futures have slipped while S&P futures edge up. The Kospi rose early in the session but gave the gains back, and there is no single clean explanation for that reversal.

Interest rates are the other brake. Friday's US jobs report showed 165,000 jobs added in October against roughly 65,000 expected. Markets now price close to an 80% chance of a Fed rate rise by year-end. The 10-year Treasury yield ended Friday up 2.2bp at 4.859%, and the five-year rose 4.0bp. Higher yields reduce the present value of profits far in the future, which is why they hit richly valued tech hardest. Oil gives some offset: Brent is down 1.38% at $96.96 after Donald Trump said further strikes on Iran were unlikely if nuclear talks make progress. Europe's Friday fall looks mostly like catching up with Thursday's late US losses. Indices won back part of it in the final hour as US chip stocks rallied.

Fear eased on Friday but has not gone. The VIX closed 2.54 points lower at 25.64, though it is still up 21% over five days. The MOVE index of bond-market volatility fell 5.26% to 92.77. The US gains were narrow: the technology sector fund rose 1.45% while consumer staples fell 1.28%. Across PrimerIQ's US universe, advancers beat decliners only 3,264 to 2,807. Outside the US, Friday was clearly defensive: our advance/decline ratio was 0.38 in the UK and 0.22 in Asia. This morning the signals are mixed. Gold is up 0.84% at $4,109, a safe-haven move, but copper is up 1.48%, which points to growth demand.

No ONS data was scheduled this morning, and the UK calendar is quiet until Thursday's third-quarter GDP at 07:00 GMT, where consensus is 0.7% quarter on quarter. Overnight, China's October inflation figures were mixed. Factory-gate prices rose 5.7% year on year against 5.3% expected, but consumer inflation slowed to 0.7%, which suggests weak domestic demand is stopping manufacturers from passing on higher costs.

Still to come today, US times converted to GMT: the Fed's Michelle Bowman speaks at 13:40 and Austan Goolsbee at 15:00. The New York Fed's one-year consumer inflation expectations survey is at 16:00, Thomas Barkin speaks at 17:15 and a three-year Treasury note auction follows at 18:00. Bank of England Governor Andrew Bailey is due to speak at 17:30 GMT. The week's main event is US October CPI on Tuesday at 13:30 GMT, where consensus expects 0.3% month on month and 3.7% year on year.

Hannover Re reported this morning: nine-month profit rose and full-year guidance was confirmed. Its shares fell 4.37% on Friday along with the other European reinsurers. In Friday's US session, Atlassian fell 16.15% after its first-quarter results, while JFrog rose 33.93% after beating forecasts and raising guidance.