This update was written automatically with AI from market data and news wire reports, and published without review by a person.
Key Takeaways
- Nasdaq 100 (NDX) plunged 6.36% on Thursday, marking its worst session since March 2020 as a Democratic sweep in the US midterms sparked fears of tighter regulation and a slowdown in the AI data center buildout.
- Gold prices retreated below $4,050/oz on Friday as the US Dollar Index (DXY) firmed ahead of the critical October US Jobs Report, which is expected to show a modest gain of 65,000 nonfarm payrolls.
- Brent Crude (BZ) reclaimed the $100/bbl level following fresh attacks on commercial vessels in the Middle East, though benchmarks remain on track for a 12% weekly decline amid shifting geopolitical expectations.
- Barclays upgraded Ryanair (RYAAY) to Overweight and Deutsche Lufthansa (DLAKY) to Equal-Weight, signaling a more constructive view on European carriers despite persistent fuel price volatility.
Market Rout Driven by AI Policy Shift
US equity markets suffered a massive "risk-off" session on Thursday, with the tech-heavy Nasdaq leading the decline. The sell-off was triggered by the Democratic Party's sweeping victory in the US midterm elections, which investors interpret as a precursor to increased regulatory scrutiny over the AI sector. Specifically, the success of 39 out of 45 ballot measures aimed at restricting data center construction has raised alarms about a potential multi-month low for chipmakers and "neocloud" providers.
The rout wiped out approximately $2.5 trillion in market value in a single day. Major chip and memory names like Nvidia (NVDA) and Micron Technology (MU) saw significant pressure as the market priced in a slower pace for AI infrastructure expansion. This sentiment spilled over into APAC markets on Friday, where the South Korean KOSPI triggered multiple "sidecars" (trading halts) following an 8% plunge at the open.
Focus Shifts to US Labor Market
Investors are now pivoting to the October US Jobs Report, set for release at 8:30 a.m. ET. Economists anticipate a resilient but moderating labor market, with nonfarm payrolls expected to rise by 65,000 and the unemployment rate holding steady at 4.2%. This data is critical for the Federal Reserve's December policy decision, where markets currently price in an 80% probability of a quarter-point rate hike.
Ahead of the report, the US Dollar has shown renewed strength, weighing on precious metals. Gold fell below the $4,050 mark on Friday morning, paring gains from earlier in the week when it touched a two-week high of $4,147. Despite the intraday dip, bullion remains on track for its biggest weekly gain since August, supported by a broader retreat in US Treasury yields earlier in the week.
Energy and Aviation Sector Developments
In the energy markets, Brent Crude hovered around $100.30 per barrel, recovering from a sharp mid-week sell-off. The rebound is attributed to short-covering and renewed supply concerns following drone attacks on Russian refineries and maritime tensions in the Middle East. However, the commodity is still facing a significant weekly loss as traders weigh the possibility of a diplomatic resolution to the Iran conflict under a new US legislative landscape.
In corporate news, Barclays issued a series of upgrades for the European airline sector. Ryanair (RYAAY) was raised to Overweight with a €29 target, while Deutsche Lufthansa (DLAKY) was moved to Equal-Weight with an €8.40 target. Analysts noted that while fuel costs remain a headwind, the airlines are showing resilience in unit revenue and capacity management, particularly as the "Lufthansa Airlines turnaround" becomes a top management priority.
Automated market updates written with AI from market data and news wire reports, published without human review.