After the tech rout, ES rebounds on semiconductors ahead of the jobs report

The essentials

• A tech rout to digest. The S&P 500 lost 4.36% on Thursday, to 7,353.73 points. It was its worst session since April 2025. Only 71 stocks rose, versus 431 decliners. Nvidia (NVDA), down 9.26%, alone cost the index about 53 points.
• Futures split. Around 11:15 Paris time, ES was up 0.51% and NQ 1.82%, while YM was down 0.62%. The rebound remains concentrated in semiconductors: Micron (MU) +8.8%, Lam Research (LRCX) +10%. It is not spreading across the broader market.
• The 14:30 jobs report will decide the direction. The consensus estimate calls for 65,000 jobs added, unemployment at 4.2%, and average hourly earnings up 0.3%. What the market is already pricing in: according to CME FedWatch, the probability of a 25 bp Fed rate hike on December 9 is 69.4%. It was close to 80% earlier in the week.
• The shock went global. The Nikkei fell 6.00% to 57,410.91 and enters a bear market. The Taiex lost 4.5% and the Kospi about 6%. The VIX is back at 26.07, after closing Thursday at 28.18 (+69.7%).
• Iran remains the second driver. Brent is down 0.64% at $97.66, after a 3.8% jump on Thursday. According to Axios, Donald Trump is weighing three options: resuming strikes against Iran, maintaining economic pressure, or negotiating.

Overnight and Europe

Thursday's session. The S&P 500 lost 334.89 points (-4.36%), to 7,353.73. It thus erased all of Wednesday's gain, its best session in three months (close at 7,688.62). The index now sits 5.9% below its October 6 record (7,818.93) and is down 3.0% for the week so far.

• Breadth: the equal-weight RSP limited its decline to 2.89%. The drop was therefore primarily driven by the heavyweights. All 11 sectors finished in the red.
• Lagging sectors: technology -8.00%, industrials -4.12%, consumer discretionary -3.83%. Energy (-2.98%) had not a single stock in positive territory.
• Most resilient sectors: communication services -0.59%, utilities -0.71%, consumer staples -0.75%.
• Intraday reversal: the Dow opened up 334 points, then selling intensified into a close near the lows.
• Biggest decliners: Sandisk (SNDK) -22.3%, Micron -17.5%, AMD -17.3%, Lam Research -16.4%, Tesla (TSLA) -10.8%, Broadcom (AVGO) -10.4%.
• Other indexes: the Nasdaq 100 lost 6.36%. The Russell 2000 (-4.45%) enters correction territory.

After the close. Lam Research announced a $25 billion share buyback, roughly 9% of its market cap. Airbnb (ABNB) raised its guidance, and Axon (AXON) lost about 14% after hours (details below).

Positioning. Retail investors sold $257 million of stocks on Thursday, their 5th-largest selling day since 2020. On Wednesday, the SPY and IVV ETFs had each taken in about $1 billion, and the SMH semiconductor ETF $1.43 billion. Those buyers are now trapped below 7,688.

Asia.

• Nikkei: 57,410.91 (-6.00%), more than 20% below its June peak.
• Kospi: about -6%. The circuit breaker was triggered after an 8.8% intraday drop.
• Taiex: -4.5%, in a bear market.
• MSCI Asia-Pacific: -4%.

Europe. At the open, the DAX was down 1.6% and the CAC 40 1.4% (Thursday closes: 26,325.01 and 8,205.37). The Stoxx 600 fell to 646.79 (-1.23%) at 09:46, with a maximum decline of 1.6% in the morning, the steepest since July. European tech, which lost 3.2% on Thursday, is holding up better this morning (-0.3%).

Central banks. On Thursday, the Bank of England raised its rate by 25 bp to 4.00%, by an 8-1 vote. It is its first hike since 2023. Banxico cut its rate to 6.25%.

Premarket. SPY is trading at $737.91 (+0.67%). The main movers:

• Nvidia: about +4%. With a weight close to 7%, that represents about 21 index points.
• AMD, Broadcom, and Intel: +5% to +8% according to Reuters.
• Airbnb: +12%.
• Monster Beverage (MNST): -2.8%.

Today's calendar

Jobs: the sub-indicators to watch.

• Private payrolls: 55,000 expected, versus 46,000.
• Manufacturing: flat expected, versus +9,000.
• Average hourly earnings year over year: 2.9% expected, versus 3.0%.
• Participation rate: 61.8% the previous month.
• September revisions: the 29,000 figure is fragile and often revised.

How to read the number. With a 69.4% probability of a December hike, a strong number (above 130,000 and wages at +0.4%) would revive the rate-hike case. It would hit tech first, whose valuation is the most rate-sensitive. A weak but non-recessionary number would lower hike probabilities and support the rebound. Unemployment at 4.4% or higher would raise fears of an economic slowdown, which would weigh on cyclicals this time.

Context. Weekly jobless claims fell to 189,000 on Thursday. Third-quarter productivity rose 3.6% (2.8% expected).

Upcoming events. The week ends tonight. On Wednesday, November 11 (Veterans Day), the U.S. bond market will be closed. The next Fed meeting is December 8-9.

Fed and rates

• Today's speakers. Alberto Musalem, president of the St. Louis Fed, speaks at 15:10, right in the middle of the reaction to the jobs report. Michelle Bowman, Fed governor, speaks at 18:15. Their tone will show whether the equity selloff is eroding the willingness to tighten.
• The last meeting. It ended in a pause.
• What the market is pricing in. According to CME FedWatch, the probability of a 25 bp hike on December 9 is 69.4%, versus nearly 80% earlier in the week.
• U.S. yields:
• 2-year: 4.474%, flat. It had lost about 12 bp on Thursday.
• 10-year: 4.859% at 12:23, up 2.2 bp from the 4.837% close.
• 30-year: 5.249%, flat.
• The 2-year/10-year spread is about 38 bp.
• Rates-oil link. On Thursday, Brent jumped 3.8% while the 10-year fell 6 bp: the flight to safety outweighed inflation fears. If Brent moves back above $100 while equities stabilize, that link is restored. Yields would then rise again, and with them the probability of a Fed hike.

Corporate earnings

The third-quarter season is wrapping up for large caps. The market is now focused less on past earnings than on the pace of AI investment.

Reported (Thursday evening and this morning)

To watch during the session

Commentary.

• Airbnb. Its revenue growth is the fastest in more than three years. It is a signal on consumer health, useful for consumer discretionary stocks, which lost 3.83% on Thursday.
• Lam Research. Its buyback, about 0.45% of the index, would add nearly 3 points at the open. Above all, it serves as a support for semiconductor equipment makers as a whole.
• Moderna and Humana. Their surprises support health care (-2.50% on Thursday). But their small weight limits the index impact to a few points.
• Charter. The loss of 233,000 Internet customers (pro forma) confirms cable's struggles against competition.
• Vistra and PPL. They are today's barometers for the "data center power" theme, which is at the heart of the post-election debate.

Geopolitics and conflicts

Midterm elections and data centers

• Actors: the Democratic Party, which retakes the House and the Senate, and Donald Trump, who blames the market drop on those victories.
• Latest development: candidates opposed to data centers won in Texas and Georgia.
• Quantified impact: the Nasdaq 100 lost 6.36% on Thursday, or $2.3 trillion in market cap, and the SMH ETF 11.21%.
• Channel to the index: AI investment, which drives semiconductors, equipment makers, and power producers.
• Opposing readings: for Jane Gibbons, strategist at Jefferies, Thursday's selloff is a reaction and not a "fundamental reset." Conversely, a further decline in semiconductors would extend the pivot toward defensive stocks.

War with Iran and the Strait of Hormuz

• Actors: the United States, Iran, and the Houthis.
• Latest development: according to Axios, Donald Trump convened his national security advisers on Iran for the first time since the elections. He must choose among three options: resuming strikes, maintaining economic pressure, or negotiating.
• Quantified impact: Brent lost nearly 9% on Wednesday, then regained 3.8% on Thursday.
• Toward a deal: an announcement of negotiations would bring Brent back below $90. Inflation expectations and Fed hike probabilities would decline, which would support the index excluding energy.
• Toward escalation: a resumption of strikes would push Brent above $100 and revive tightening expectations. The risk is greatest this weekend, while the market is closed.

Oil and commodities

• Brent: $97.66 (-0.64%), after a Thursday close at $98.29 (+3.8%).
• WTI: $89.78 (-0.82%), after a Thursday close at $90.52 (+2.7%).
• Gold: $4,078.10 (-0.18%).

Index impact. The energy sector ended Thursday without a single gainer despite the rise in crude, proof that the selling was across the board. Brent above $100 would support the sector, but would also revive inflation expectations and fears of a Fed hike: the net effect would be negative for the index. Below $95, the easing in rates would prevail.

Dollar and volatility

• Dollar: the DXY stands at 102.00 (+0.48%), lifted by the flight to safety.
• FX at Thursday's close: EUR/USD finished at 1.1222 and USD/JPY at 157.67.
• VIX: 26.07, edging lower after its biggest one-day rise in about 19 months.
• Thresholds:
• above 30, hedge buying would accelerate;
• below 24, Thursday's selloff could be characterized as a one-off excess.
• Divergence between indexes: NQ is up 1.82% while YM is down 0.62% and the Russell 2000 is up only 0.22%. The rebound remains a semiconductor rebound, not a broad return of risk appetite.

Watch points for the session

1. 14:30, jobs report. Between 25,000 and 100,000 jobs added, with wages at +0.2% or less, the morning rebound would be confirmed. Above 130,000, or with wages at +0.4%, the 10-year would climb back above 4.90% and the scenario would be invalidated. The September revisions matter as much as the headline number itself.
2. 15:10, Musalem. A speech that keeps the December hike on the table would cap tech's recovery.
3. 15:30, cash open. Nvidia (about 7% of the index), Broadcom, and Lam Research should create a buy-side imbalance at the open. Check whether breadth follows: more than 250 advancing stocks would confirm the move, fewer than 150 would signal a rotation without broad participation. Levels to watch:

• 7,300, in line with Thursday's lows;
• 7,688, Wednesday's close, where the trapped buyers sit;
• 7,037, the 10% correction threshold.

1. 16:00, Michigan and Vistra. Inflation expectations at 4.9% or higher would rekindle rate-hike fears. Vistra's conference call will test the "data center power" theme.
2. 18:15, Bowman, then Brent: above $100, weekend hedging would accelerate.
3. 22:00, weekly close. Liquidity will be thin on a Friday after a shock, with unresolved Iran risk over the weekend. The S&P 500 needs to gain more than 3.1% to erase its weekly loss. No S&P 500 company reports tonight. Futures will reopen Monday at 00:00 Paris time and will then digest any Trump decision on Iran.

Morning tone: a technical rebound driven by semiconductors, without breadth, hinging on the jobs report; average hourly earnings at +0.4%, a 10-year above 4.90%, or a VIX above 30 would turn it into a mere pause in the selloff.