US Stocks Open Lower and Move Higher, SOX Leads Gains
After plunging in the previous session, US artificial intelligence stocks got a breather on the 6th. The Dow Jones Industrial Average opened 444 points lower and was down as much as 530 points at its worst, before sharply narrowing its decline to close down 237.33 points, or 0.46%, at 51285.73. The S&P 500 rose as much as 1.23% intraday and ended up 23.13 points, or 0.31%, at 7376.86. The Nasdaq rose as much as 2.1% intraday and closed up 264.43 points, or 1.09%, at 24579.43. The Philadelphia Semiconductor Index rebounded as much as 6.84% intraday and closed up 379.11 points, or 4.21%, at 9390.25.
Midterm Elections Fuel AI Regulation Concerns
The US Democratic Party scored major victories in the midterm elections, retaking control of both the Senate and the House and winning gubernatorial races in several key states. Markets worried that AI data center construction will face more restrictions, weighing heavily on semiconductor and AI stocks, with all three major US indexes posting their worst single-day performances since April 2025 on Thursday. US President Trump posted on social media, blasting the market crash as caused by stupid Democrats and sarcastically telling voters who voted for Democrats to blame only themselves, while still telling investors not to be afraid and stressing that America will soon become stronger.
Stronger-Than-Expected Payrolls Lift Rate-Hike Expectations
The US Department of Labor reported that nonfarm payrolls rose by 165,000 in October, far above market expectations of 65,000. August payrolls were revised up from 133,000 to 186,000, and September payrolls were revised up from 29,000 to 60,000, for a combined upward revision of 84,000 for the prior two months. The unemployment rate in October fell 0.1 percentage points to 4.1%, versus expectations it would hold at 4.2%. Average hourly earnings in October rose 3.1% year on year, more than the expected 2.9%. After the data, the US 10-year Treasury yield rose as much as 6.58 basis points to 4.9005%, while the 2-year Treasury yield jumped 7.84 basis points to 4.5407%. Markets expect about a 70% chance the Federal Reserve will raise rates at its December meeting. New York Fed President Williams reiterated that current inflation remains too high, but other indicators are not sending worrying signals, and he agreed with the Federal Reserve's stance in its prior meeting statement that data should be collected to assess risks to prices.
AI Chips Lead Gains, TSMC ADR Surges
Markets continued to watch the outlook for US-Iran tensions. NYMEX crude rose as much as 2.22% to a high of 92.53 dollars per barrel, closing at 90.83 dollars, up 0.34%, while Brent crude edged up 0.03% to close at 98.32 dollars. Semiconductor and AI stocks rebounded notably, with Nvidia closing up 2.78% at 186.64 dollars per share, Intel surging 7.71% to close at 56.28 dollars per share, AMD soaring 11.04% to close at 449.04 dollars, SanDisk rising 3.55% to close at 835.06 dollars, and Micron jumping 5.12% to close at 690.00 dollars per share. TSMC was reported to have begun evaluating and studying a plan to produce 3D DRAM advanced memory chips at the request of its largest customer Nvidia, and TSMC ADR surged 6.33% in response to close at 375.56 dollars per share. Tesla CEO Musk said Tesla will scale back Cybertruck production at its Texas plant around the middle of next year to make room for more Cybercab production, without saying whether it will halt production entirely; Tesla rose 4.23% to close at 358.22 dollars. Microsoft was reported to have decided not to renew its AI cloud computing contract with Oracle and to have gradually stopped using leased computing resources in recent months; Oracle rose 0.89% to close at 116.1 dollars, while Microsoft fell 0.99% to close at 530.61 dollars. Leading tech stocks were mixed, with Meta up 0.84% to close at 610.15 dollars, Alphabet up 0.78% to close at 283.93 dollars, Amazon down 0.35% to close at 259.3 dollars, and Apple closing down 0.52% at 342.37 dollars. Among Taiwan stocks' ADRs, UMC ADR rose 3.51% to close at 13.85 dollars, while ASE ADR climbed 6.43% to close at 31.63 dollars.