Global stocks tumble as AI panic grips markets; US adds 165,000 new jobs in October – business live

A late update: With two hours to go before Wall Street closes, the tech rebound continues.

The Nasdaq Composite index, which sank into ‘correction territory' yesterday, is up 1.3% now.

Aerospace manufacturer and launch service provider Rocket Lab are the top riser, up 12.5%, followed by Airbnb (+11.7%), AppLovin (+10%), Advanced Micro Devices (+9.3%) and Intel (+8.9%).

But….Fawad Razaqzada, market analyst at Stonex Trading and FOREX.com, says AI concerns linger, explaining:

Technology stocks staged a sharp recovery on Friday after yesterday's brutal sell-off wiped trillions of dollars off global equity valuations. All major AI-related stocks – Nvidia, AMD, Broadcom and Core Weave – bounced back. But whether recovery holds is another matter.

After Thursday's brutal sell-off wiped trillions of dollars off global equity valuations. Today's bounce has carried the Nasdaq 100 straight back into former support, and the worries behind the rout, from AI regulation to the sheer scale of tech spending, have not gone away.

With the index still carving out lower highs and lower lows, we maintain a cautious Nasdaq 100 forecast, and the near-term risk remains tilted to the downside.

Here's a late take on this week's sell-off, from Lee Robinson, CIO of Altana Downside Protector Fund and founder of Altana Wealth:

“This sell off has been a long-time coming, and it is not just caused by the midterms or an unwinding of positions in the tech giants. What we are seeing today is the result of stretched valuations and last month's re-pricing in credit markets, specifically the rising Credit Default Swaps of the Magnificent Seven and CoreWeave.

Credit is the engine of capital markets which equities will always eventually follow. We launched the Altana Downside Protector to trade a major downturn that we could see playing out over the next 18 months.

The key questions now are who gets hurt by this selloff and what happens next. We see a lot of risk being held by life insurers who are some of the largest owners of AI-linked private credit funds and could be facing a series of de-ratings across their balance sheets.â€

[Credit default swaps are an insurance contract that pays out if a company defaults on its debt, as covered in The Big Short].

With European stock markets closed after a nervy day, and Wall Street calmer than yesterday, it's time to wrap up…

European stock markets fell sharply today as a rout in US tech stocks spread across the Atlantic, after the Democrats' midterms victory sparked fears of a slowdown in the AI industry.

A sell-off on Wall Street on Thursday was followed by sharp falls in Asian stocks markets overnight. The investor sentiment then reached London, where the market was, at one stage, poised for its worst day since March.

The FTSE 100 index, which tracks blue-chip shares listed in London, was down as much as 254 points, or 2.35%, at 10,528 points during a wave of selling in morning trading. But by the close of the day it had recovered to a 1% fall, helped by a bounce in US stocks when Wall Street reopened.

Across Europe, there were similar losses: Germany's Dax index has fallen by 2%, France's Cac 40 has lost 0.8%, and Spain's Ibex ended the day down 0.6%. Italy's FTSE Mib fell 0.9%.

In Asia-Pacific markets, Japan's Nikkei 225 index sunk 6% and South Korea's Kospi index tumbled more than 6.5%.

“It's actually a bit of a disaster,†said Christopher Forbes, the head of Asia and Middle East at CMC Markets.

“[Clients] were long index, long stocks, and they all got carried out. All night, all day – we had client margin calls, client complaints … because it's a very emotional thing, right? People are wedded to their positions and views on a stock or outcome, and you're telling them: ‘Look, you've just lost money.'â€

Over in New York right now, the Nasdaq is up 1.5% (having fallen by 5.5% yesterday), and the S&P 500 is up 0.7%.

Here's the full story:

Here's the rest of today's top business news:

Global financial markets have been thrown into a tailspin as investors bet on an AI slowdown after the US midterm elections.

This is not the first time stock markets have wobbled in recent months due to concerns over a tech bubble. But could this volatility be the start of a huge market meltdown?

Read more here:

Europe's other major stock markets also recovered some, but not all, of their earlier losses.

Germany's Dax index has fallen by 2%, France's Cac 40 has lost 0.8%, and Spain's Ibex ended the day down 0.6%. Italy's FTSE Mib fell 0.9%.

Phew! After a volatile day's trading, the London stock market is closed.

And after an early slump, triggered by Thursday's Wall Street rout, UK stocks have recovered some of their losses.

The FTSE 100 share index has closed for the night down 108.7 points, or 1%, at 10,673 points.

That will make a dent in millions of ISAs and pensions, but it's not as bad as this morning's worst point when the Footsie was down 2.35% and heading for its worst day since March.

The US dollar has strengthened further today, and is now up 0.65% against a basket of other currencies.

The London stock market has recovered some, but by not means all, of its earlier losses.

The FTSE 100 index is now down 145 points, or 1.35%, at 10,637 – having earlier been down as much as 2.35%.

Today's better-than-expected US jobs report may be helping Wall Street to recover.

“This was a relatively strong jobs report across the board,†said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research.

“It may help calm some of the fears that spread to the markets yesterday on AI concerns, supporting the case that the economy remains strong.â€

Elon Musk is clawing back some of the $113bn he's lost in the previous two days (see earlier post).

Tesla's shares are up 4.9%, while SpaceX have gained 6%, after both stocks fell by over 10% over Wednesday and Thursday.

Trading platform Hargreaves Lansdown reports that its clients have been “buying the dip†– the practice where investors pile in when a stock falls to tempting levels.

Anna Macdonald, investment strategy director at Hargreaves Lansdown, suggests this week's tech selloff (which is already unwinding) is a buying opportunity:

Macdonald says:

“Trading interest in overseas AI and technology companies has been growing all week. We've seen some larger investors taking risk off the table, but the average trade has been a buy with Nvidia, SpaceX, Micron, AMD and Alphabet making up the top five. Nvidia and SpaceX are the headline names, while Micron and AMD give investors exposure to the hardware side of the story. Alphabet is interesting too, as its shares were marked down after disappointing numbers and clients have used that as an opportunity to buy.

Overall, many of our clients are taking a long-term view and see this as a moment to get back into some of these names at a cheaper entry point.

Yesterday's sell-off looks like an overreaction. We've seen these wobbles before and we'll see them again, but investors need to focus on the fundamentals. Demand for AI isn't going away, and we expect the newly elected US officials to take a pragmatic approach to the buildout.

For patient investors, this is an opportunity to invest in high-quality companies at valuations we haven't seen in a long time.â€

[We don't do investment advice here at the Guardian, beyond Caveat emptor, dear readers.]

After a slow start, the S&P 500 index of US stocks is rising, up 1% today.