November 6, 2026, (Inside AI) — Nasdaq futures rose early Friday, with chip stocks leading a partial recovery after a technology-led selloff erased nearly $3 trillion in market value from S&P 500 companies. The rout followed this week's midterm election results, which gave Democrats control of Congress and raised fears of tougher AI regulation.
The Nasdaq Composite suffered its deepest one-day drop in 19 months on Thursday, confirming a correction and putting the index on course for a fourth straight weekly decline. By early Friday, Nasdaq 100 E-minis had gained 395.25 points, or 1.48%, while S&P 500 E-minis added 0.39%. Dow E-minis slipped 0.66%.
The selloff matters beyond Wall Street. AI data centers have become a pillar of the U.S. economy, and any signal that their buildout could slow ripples through chipmakers, utilities, and cloud providers. Investors now must weigh whether political change will translate into real policy shifts or merely noise.
Why Chip Stocks Rebounded After A $3 Trillion Wipeout
Nvidia rose 3.6% in premarket trading after its biggest one-day fall since January 2025. That earlier plunge came when the low-cost Chinese AI model DeepSeek rattled markets. Other chipmakers posted sharper gains: AMD, Intel, Broadcom, and Micron Technology climbed between 5% and 8.3%.
Data-center operators IREN and Applied Digital, neoclouds CoreWeave and Nebius Group, and AI-exposed utilities like GE Vernova and Constellation Energy all recovered from Thursday's deep losses.
"We view Thursday's selloff as reactionary, not a fundamental reset, driven by a collision of concerns around AI spend, policy and inflation," said Jane Gibbons, equity strategist at Jefferies.
The CBOE Volatility Index, Wall Street's main fear gauge, logged its biggest one-day jump in about 19 months on Thursday. It eased slightly to 26.07 on Friday.
Thursday's damage had multiple triggers. A jump in crude oil prices revived fears of energy-driven inflation and possible rate hikes. Brent crude fell 0.7% on Friday. Traders now price a more than 65% chance of a December rate hike, according to the CME FedWatch Tool.
The political shock compounded those worries. Democratic victories in key data-center states fueled speculation that AI infrastructure incentives could face new scrutiny. The market had spent much of the year pricing in uninterrupted AI growth, pushing indexes to record highs. That assumption now faces its first real political test.
One overlooked detail: the selloff hit companies far beyond chip designers. Utilities and equipment suppliers tied to data-center power demand fell alongside neoclouds. This suggests investors treat AI exposure as a single trade, not a diversified bet. If that correlation holds, political headlines will keep moving entire supply chains, not just semiconductor stocks.
Among individual movers, software firm Atlassian dropped 15.6% after reporting first-quarter results. Vacation rental platform Airbnb climbed 12.1% after raising its full-year 2026 revenue growth forecast.
An October jobs report due at 8:30 a.m. ET could be the next catalyst for rate expectations. A strong print would harden the case for a December hike and test whether Friday's rebound has staying power. A weak one could ease pressure on growth stocks.
For now, the chip rebound signals that investors see Thursday's rout as overdone. Whether that view survives the jobs data and the first concrete regulatory signals from the new Congress is another matter. The AI trade has weathered skepticism before. It has not yet weathered a hostile legislature.
Shamil has a low tolerance for AI that only works in controlled demos. He covers agentic systems and generative AI with the skepticism of someone who has seen too many “revolutionary” tools quietly disappear six months after launch.
