AI stocks rebound after trillions erased in Thursday's market rout

Artificial intelligence and tech stocks clawed their way back on Friday, a day after a brutal sell-off vaporized trillions of dollars in market value. The tech-heavy Nasdaq Composite opened 1.23% higher and kept gaining in early trading, recovering part of the 5.5% dive it took on Thursday. The S&P 500 also ticked up at the open, while the Dow Jones Industrial Average slipped slightly.

Thursday's biggest casualties led the bounce. Nvidia shed hundreds of billions in market value after its shares slid more than 9%, then jumped more than 6% out of the gate Friday. SpaceX shares climbed more than 7%, while Tesla recovered nearly 3% after both were hammered the day before.

The rout had its roots in politics. Democrats campaigned hard on new rules for AI and data centres, and their midterm sweep handed them control of both houses of Congress plus key contests in states caught up in the AI data centre race. Investors read the results as a signal that AI development could slow down.

President Donald Trump pushed back Friday, repeating his support for what he calls 'super intelligence' and arguing only 'foolish leadership' would 'say no to the riches they bring.' Hovering over all of it: nagging doubts about whether the colossal sums being poured into AI will ever pay off.

Traders also had fresh jobs data to chew on. The latest employment report showed employers added 165,000 new jobs, well above the average monthly increase and more than double what analysts expected. The unemployment rate eased to 4.1% from 4.2%, with the Bureau of Labor Statistics noting it has stayed in a tight 4.1% to 4.3% band since March. Professional and business services led the gains with 70,000 jobs, healthcare added 42,000, and transportation, warehousing and manufacturing also chipped in.

Neil Birrell, chief investment officer at Premier Miton, said the jobs numbers matter even if they played second fiddle to the market drama. 'The US economy is running hard which may mean the risks the markets are worrying about at the moment are not such a risk to the real economy as is being feared,' he said. Investors will now watch whether Friday's rebound holds or fades.