Stock Market Today: Nasdaq and S&P 500 Rebound as Chip Stocks Rally, Airbnb Surges and Jobs Report Shakes Fed Outlook

U.S. stocks stabilized on Friday as semiconductor shares rebounded from Thursday's historic selloff, although stronger-than-expected employment data complicated Wall Street's outlook for interest rates. The Nasdaq Composite climbed approximately 1.7% in late-morning trading, while the S&P 500 advanced 0.9% and the Dow Jones Industrial Average hovered near the flatline. Technology stocks led the recovery, with Nvidia, AMD and Micron attracting buyers following one of the sector's steepest declines in years.

The gains followed a punishing Thursday session that saw the Nasdaq plunge 5.5%, the S&P 500 tumble 4.4% and the Dow shed more than 1,800 points. Concerns about tighter AI regulation and potential delays to data center construction had triggered widespread selling following the midterm elections. Friday's rebound offered some relief, but a surprisingly strong October jobs report raised questions about whether the Federal Reserve could increase interest rates again in December.

Market Movers:

• Advanced Micro Devices (AMD) +12%: Shares surged as semiconductor stocks recovered from Thursday's steep losses amid renewed buying interest in AI-related companies. The rebound followed a particularly difficult session for AMD, which had been among the hardest-hit chipmakers during the previous day's selloff.
• Airbnb (ABNB) +10%: Shares rallied after the vacation rental platform reported third-quarter revenue of $4.87 billion, up 19% from a year earlier, and earnings of $3.16 per share. Strong travel demand prompted management to raise its full-year revenue growth outlook and announce a new $12 billion share repurchase program.
• Cloudflare (NET) +12%: Shares jumped after the internet infrastructure company reported a 39% increase in quarterly revenue to $782.5 million, exceeding Wall Street's expectations. Strong demand for its cloud and cybersecurity services helped deliver its fastest quarterly revenue growth in nearly four years.
• IREN (IREN) +18.1%: Shares surged in premarket trading after the data center operator reported fiscal first-quarter revenue of $228 million, exceeding analysts' estimates. AI cloud revenue nearly tripled sequentially to $200 million, reinforcing confidence in the company's expanding infrastructure business.
• DraftKings (DKNG) -21.7%: Shares plunged in premarket trading after the sports betting company reported disappointing third-quarter results and lowered its full-year adjusted EBITDA outlook. Investors were particularly concerned about spending on its prediction markets business and the potential impact on profitability.
• Atlassian (TEAM) -15.8%: Shares tumbled in premarket trading despite the enterprise software company reporting quarterly revenue of $1.77 billion and adjusted earnings above expectations. Investors focused on its fiscal 2027 revenue growth forecast of approximately 13.75%, signaling a significant slowdown from its latest quarterly growth rate.
• Five9 (FIVN) -16.7%: Shares declined in premarket trading after the cloud contact-center software provider issued weaker-than-expected fourth-quarter earnings guidance. The disappointing outlook overshadowed third-quarter revenue growth of 13% and an earnings beat.

Chip Stocks Rebound After Thursday's Historic AI Selloff

Semiconductor stocks led Friday's recovery after investors rushed back into companies that had suffered substantial losses during Thursday's market rout. Nvidia, Micron, Intel and AMD all advanced, while the iShares Semiconductor ETF climbed approximately 6% in early trading after falling 12% the previous day. The rebound suggested that some investors viewed the sharp decline as an opportunity to buy shares of companies still benefiting from substantial demand for AI computing infrastructure.

However, uncertainty surrounding the industry's growth outlook remains elevated. Democratic victories in the midterm elections raised concerns that additional scrutiny of data center construction could slow infrastructure expansion, particularly in states facing rising electricity costs and local opposition to large facilities. Although Friday's gains helped recover some losses, investors remain sensitive to any indication that major technology companies could scale back their ambitious AI spending plans.

Strong October Jobs Report Raises Interest Rate Concerns

The U.S. economy added 165,000 jobs in October, significantly exceeding economists' expectations of approximately 65,000. The unemployment rate also declined to 4.1%, while average hourly earnings increased 0.4%, providing evidence that the labor market remains resilient despite elevated borrowing costs. The stronger figures offered reassurance about economic growth but complicated expectations for the Federal Reserve's next policy decision.

Treasury yields moved higher following the report, with the benchmark 10-year yield approaching 4.9%. Investors increasingly expect the Fed to consider another interest rate increase in December as persistent inflation and a resilient labor market reduce pressure for monetary easing. Higher yields could create additional challenges for technology stocks, particularly companies whose valuations depend heavily on expectations for future earnings growth.

Corporate Earnings Highlight Diverging Business Conditions

Friday's corporate earnings reactions revealed a sharp divide between companies benefiting from strong demand and those struggling to meet investor expectations. Airbnb's results pointed to continued strength in global travel, while Cloudflare's accelerating revenue growth demonstrated sustained demand for internet infrastructure and cybersecurity services. Both companies offered encouraging outlooks, helping their shares outperform the broader market.

DraftKings and Atlassian faced a different response as investors scrutinized profitability and future growth expectations. DraftKings' spending plans raised concerns about near-term earnings, while Atlassian's outlook suggested that growth could moderate despite another solid quarter. The contrasting performances underscored Wall Street's increasing emphasis on financial discipline and forward guidance rather than headline earnings beats alone.

Looking Ahead

Wall Street enters the final stretch of the week balancing a semiconductor recovery against renewed concerns about interest rates and AI infrastructure spending. Investors will be watching whether Friday's rebound can hold after Thursday's sharp losses, particularly as the Nasdaq remains on track for another weekly decline. The stronger-than-expected jobs report also puts the Federal Reserve's December meeting firmly in focus. With Treasury yields rising and corporate earnings producing sharply different reactions, investors may remain selective as they assess whether the technology sector can regain momentum without another round of volatility.