Big Tech sheds $1 trillion as AI regulation fears rattle markets
- The Magnificent Seven lost over $1 trillion in market value on Thursday.
- Nasdaq Composite fell 5.52% in its worst session since April 2025.
- Investor fears stem from potential data center restrictions following US midterm elections.
- Nasdaq-100 futures rose 1.7% on Friday morning as markets attempt a recovery.
- Analyst Dan Ives expects Big Tech capital expenditure to peak in 2027.
This sell-off triggered the steepest decline for the S&P 500 in more than a year.
The Nasdaq Composite fell 5.52% to close at 24,315, entering correction territory by falling more than 10% below its October record. This marked the index's steepest single-day decline since April 2025.
Nvidia shares declined approximately 9% on Thursday, causing the company to lose over $440 billion in market capitalisation.
Election results spark data center regulation fears
Fears regarding tighter data centre regulation caused a $3 trillion loss in the S&P 500 during the previous session.
Investors are currently assessing AI spending risks and data centre restrictions.
He attributed this potential slowdown to a Democratic "blue tidal wave across the Senate and House".
Global markets react to Wall Street's worst session
European markets showed resilience on Friday, as the Stoxx 600 technology index rose 0.44%. Chipmakers ASML and ASMI led this movement, gaining approximately 4% and 3% respectively.
South Korea’s Kospi index plunged more than 6% on Friday. Japan’s Nikkei 225 fell 5.9% on the same day, entering bear market territory.
Nasdaq-100 futures rise 1.7% on Friday morning
Nasdaq-100 futures showed signs of a potential recovery on Friday morning, with NDTV Profit reporting a 1.7% increase. Bloomberg reported a more modest rise of 1.3% for Nasdaq-100 contracts.
This follows Thursday's trading session, which was the worst for Wall Street since April 2025.
Dan Ives predicts AI spending peak in 2027
He revised his previous forecast, which had placed the turning point in 2028 or 2029.
Ives anticipates a rebound starting in the second half of 2027, with the recovery accelerating in 2028 and showing significant increases in 2029 and 2030.
Retail sentiment shifts on Magnificent Seven ETF
The Roundhill Magnificent Seven ETF (MAGS) fell 1.5% at the market open on Thursday. Retail sentiment on Stocktwits improved to neutral from bearish alongside high levels of chatter.
During Wednesday morning trade, the iShares Semiconductor ETF (SOXX) fell over 6%.
Retail sentiment on the platform for the ticker trended bullish with high levels of chatter.
Economists await October US jobs report
Economists polled by Dow Jones expect the October US jobs report to show 59,000 jobs added. The report is expected to show an unemployment rate of 4.2%.
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