Nasdaq stock index futures rebounded on Friday. Previously, the Nasdaq index fell into a correction zone, and some investors took the opportunity to buy at lower prices as chip stocks tumbled.

The Dow Jones fell by 0.99%, the S&P 500 index rose by 0.22%, and the Nasdaq index rose by 1.27%.

A strong employment report in October pushed up U.S. Treasury yields, limiting the increase in stock market indices.

"Seven Sisters" group: NVIDIA rose by 5.66%, Tesla rose by 2.16%, Google rose by 1.36%, Meta Platforms rose by 1.02%, Amazon rose by 0.26%, Microsoft fell by 0.98%, Apple fell by 1.12%.

The Democratic Party achieved a great victory in both the Senate and House of Representatives, as well as in the gubernatorial elections of several key states. Consequently, there are concerns that data center construction may face tighter regulation, and these concerns dealt a heavy blow to the U.S. stock market on Thursday.

The intense selling on Thursday resulted in the worst single-day performance for the three major U.S. stock indices since April 2025. The Nasdaq Composite Index tumbled 5.5%, closing more than 10% below its recent highs, entering what Wall Street defines as a correction zone. The broad-based S&P 500 index fell 4.4%, while the Dow Jones Industrial Average plummeted by over 1,800 points, a decline of 3.4%.

All 11 industry sectors of the S&P 500 closed lower, with companies related to the expansion of artificial intelligence leading the decline in the market.

Micron Technology's stock price rebounded by 9% following a 17% drop on Thursday; NVIDIA plummeted by 9% the previous day but rose by 3% on the same day.

Quilt Portfolio Manager Stuart Clark stated in an email: "The decline of some leading market stocks is quite astonishing, which also highlights the growing concentration risk in the U.S. stock market."

"Today, a few technology and chip stocks hold a very high weight in the market. Once these stocks weaken, they can quickly cause a significant decline in NASDAQ and the S&P 500."

In just one trading day on Thursday, the total market value of the stocks of the "Gorgeous Seven Giants" significantly shrank.

After the Democratic Party's great victory in the general election, senior members of the Democratic Party have already begun discussing regulatory restrictions on data centers. Texas is a core area in the United States for data center aggregation. Gina Inohosa, the newly elected governor of Texas, stated in an interview with CNN on Thursday evening: "We will introduce laws to protect the citizens of this state; before the relevant protective regulations are implemented, we need to halt current data center construction."

Investors also reacted to the latest non-farm payroll report: The United States added 165,000 new jobs in October, far exceeding market expectations. Economists surveyed by Dow Jones had previously predicted only 59,000 new jobs; the unemployment rate fell to 4.1%, whereas economists originally expected it to remain unchanged at 4.2%.

Even though the stock market saw a significant rebound on Wednesday after the election results were announced, the three major stock indices still ended the week with declines. As of Thursday, the Nasdaq index had fallen by about 4.4% this week, while the S&P 500 index had lost nearly 3%; the Dow Jones index, which consists of 30 components, performed relatively better, with a decline of only 0.5% so far this week.

Looking back at historical trends, it can be observed that tech stocks usually stabilize within 3-6 months after a pullback, but the short-term market still experiences fluctuations.

The market is very close to the final stage of panic selling.

However, some analysts believe that the recent market sell-off may have been excessive, and the stock market might not be far from a temporary bottom.

CaixaBank of the asset management company stated, "The market performance on Thursday is already very close to the final stage of panic selling." He added, "It may still be too early to determine that the market has hit bottom, but a large amount of risk has been released, and currently, the fundamentals of companies have not confirmed the market's most pessimistic concerns about AI."

Mega Financial Holding, Vice President of the Stock Trading Department, stated: "Today, we are bound to see more financing accounts undergo forced liquidation, which indicates that the market may have entered the final stage of panic selling."

He added, "Even TSMC once hit the daily limit down, which is usually a sign that the market downturn is coming to an end. When even TSMC is being sold off, it means that almost all stocks have been completely sold."

Hedge funds are under pressure

At the same time, political uncertainties are impacting the AI transactions, which are already fragile due to doubts about the return prospects of massive AI infrastructure investments. This market crash has triggered additional margin requirements, which have not only panicked retail investors but also affected hedge funds.

After experiencing its worst single-month performance since March 2020, Walleye Capital is returning funds to some investors. The macro hedge fund Kirkoswald Asset Management managed by Greg Coffey (Greg Coffey) recorded the most severe single-month decline in its history. Arini Capital Management, one of the fastest-growing hedge funds in Europe and focused on credit investment, lost more than 12% just last month.

The chairman of asset management company Lingtong Shengtai, Dong Baozhen, stated: "This round of selling indicates that the price of AI shares was previously based on overly optimistic fantasies about the future, and now those fantasies have shattered."

He said, "The U.S. stock market has always been the standard-bearer and pillar of the global AI bull market. Now that this pillar has broken, can the AI bull markets in other markets still sustain themselves on their own?"

Approximately 40% of the planned data center capacity in the United States is located in states that are considering suspending construction.

Data from market intelligence firm Cleanview shows that approximately 40% of the planned data center capacity to be built in the United States is set to be located in the aforementioned states.

In addition, according to statistics, 46 local referendum measures have been passed or are expected to be passed, and these measures will also hinder the development of data centers. At least 17 of them directly prohibit the construction of large data centers.