Tech shares rebound following massive sell-off triggered by AI concerns

Technology and artificial intelligence shares staged a modest recovery on Friday, paring losses after a severe global sell-off erased trillions of dollars in market valuation.

The rebound was led by Wall Street, where the tech-heavy Nasdaq Composite rose 1.1% by the close, regaining a portion of the 5.5% drop experienced the previous day. The broader S&P 500 gained 0.3%, while the Dow Jones Industrial Average slipped 0.4%. Heavily traded firms that experienced steep declines earlier in the week, including Nvidia, Tesla and SpaceX, clawed back some value.

The market turmoil began in the United States on Thursday before spreading across Asian and European bourses into Friday. Investors had pulled back from tech equities following midterm election results that handed Democrats control of both chambers of Congress. Several Democratic candidates had campaigned on tightening oversight for artificial intelligence technologies and data centres, sparking fears that regulatory hurdles could decelerate the sector's growth.

International markets struggled to mirror the late-week American turnaround. South Korea's Kospi sank 6%, heavily impacted by a double-digit decline in chip manufacturer SK Hynix. Major stock benchmarks in France, Germany and Spain also ended the session lower, while the FTSE 100 in the United Kingdom fell 1.01%. In London, equity sentiment was further dampened by the Bank of England's decision to increase interest rates, accompanied by signals that additional tightening could follow to tackle inflation.

Market analysts pointed to broader underlying anxieties over corporate spending on AI infrastructure alongside political shifts. Industry leaders noted that enormous capital expenditures on data centres and hardware have yet to demonstrate proportional economic returns, triggering what some described as a necessary pricing correction.

In contrast to political uncertainties, positive economic data from the United States provided support to equity trading on Friday. The Bureau of Labor Statistics reported that American employers added 165,000 jobs, significantly surpassing analyst expectations. The national unemployment rate ticked down marginally to 4.1%, continuing to hold within the narrow band recorded over recent months.

Responding to the market movements and policy debates, US President Donald Trump reiterated his support for advanced AI capabilities on Friday, arguing that rejecting the economic wealth generated by super intelligence would reflect poor leadership. Market watchers expect trading next week to offer a clearer view on whether the late-week rebound marks a temporary pause or a durable stabilization for the technology industry.