The Dow Jones Industrial Average plunged Friday while the tech-heavy Nasdaq reversed a weeks long rout just a day after Wall Street suffered its worst trading session in more than a month.
The Dow had plunged 107 points, or 0.2%, as of about 12:20 p.m. ET.
The S&P 500 rose 0.5%, while the Nasdaq jumped 0.8% – on track to break a three-day losing streak.
Tech stocks rebounded after investors led a weeks-long sell-off, panicked over whether artificial intelligence firms have been overvalued – potentially creating an AI “bubble.”
Major tech stocks like Nvidia, AMD and Broadcom jumped 1.7%, 1.8% and 1.3%, respectively.
Some other “Magnificent Seven” stocks saw gains after being hit hard earlier in the session, with Tesla rising 1.7%.
Meta, Apple and Microsoft rose 0.3%, 1% and 1.3%, respectively.
The Technology Select Sector SPDR Fund – which lost 2% Thursday – jumped 1.4% Friday.
Bitcoin, however, plunged 2.8% to $96,922.63 as investors pulled back from riskier stocks.
Fears that American companies have been overspending on AI, with some already shelling out billions of dollars, rocked the markets over the past two weeks.
“We are finally starting to see the market bumps that many investors have been waiting for, but that never came,” Rick Gardner, chief investment officer at RGA Investments, said in a note Friday.
“Stocks don’t rise in a straight line and a pullback has been long overdue.”
Meanwhile, the US government reopened on Thursday after its longest-ever shutdown, easing some concerns around SNAP benefits and federal workers.
But White House press secretary Karoline Leavitt said that some October government data may never be released.
National Economic Council Director Kevin Hassett added that while the October jobs report will eventually be released after a delay, it will not include the unemployment rate.
“While the government shutdown is over, there continues to be an economic data blackout that will take some more time to work itself out and this is partly why stocks have been pulling back and trying to find their footing,” Gardner said in his note.
“We expect some market bumps over the next few months as the resumption of the economic data reports may cause some volatility.”
Economic data on inflation and the labor market is key to the Federal Reserve’s decision-making process.
The odds of a quarter-point cut at the Fed’s Dec. 10 meeting dropped after the White House said some economic data may never be released, according to CME FedWatch.
Antsy investors are also keen to see whether there has been underlying softness in the labor market or inflationary pressures while stocks have soared to record highs.
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