Nov 6 (Reuters) - The Nasdaq was set to open higher on Friday as chip stocks came off heavy losses posted during a sharp selloff on fears that a Democratic-led Congress could result in tougher AI regulation, even as the jobs report raised interest-rate hike concerns.
The Nasdaq Composite (.IXIC), logged its steepest one-day decline in 19 months in the previous session, confirming it had entered correction territory. The index was also headed for a fourth straight weekly fall.
The selloff followed Democrats' midterm election victory, including in some key data-center states, stoking concerns that AI data-center buildout could slow. Optimism over the sector's rapid growth had propelled stock markets to record highs this year.
Wall Street's fear gauge, the CBOE Volatility Index (.VIX), logged its biggest one-day jump in about 19 months on Thursday. It was down slightly on Friday, at 26.70.
On Friday, US nonfarm payrolls increased more than expected in October and the unemployment rate fell to 4.1%, suggesting the labor market remained resilient.
"Those are strong numbers and normally that would say that the Fed would have to be more on the hawkish side," said Joe Saluzzi, co-head of equity trading at Themis Trading.
"The flip side of that is that what we saw yesterday and how volatility has spiked, will the Fed want to raise interest rates in the face of a market which is teetering?"
Traders added to bets that the Fed could hike rates as soon as next month, with a 78% chance of a December move compared with a 70% chance seen earlier.
At 8:43 a.m. ET, Dow e-minis were down 547 points, or 1.06%, S&P 500 E-minis were up 5.75 points, or 0.08%, and Nasdaq 100 E-minis were up 346 points, or 1.29%.
Megacap and growth stocks were mixed. Nvidia (NVDA.O), added 4.2% in premarket trading, after suffering its worst day since January 2025 when the emergence of low-cost Chinese AI model DeepSeek rattled Wall Street.
Other chip stocks such as AMD (AMD.O), Intel (INTC.O), Broadcom (AVGO.O), and Micron Technology (MU.O), were up between 5% and 9%.
Data-center operators IREN (IREN.O), and Applied Digital (APLD.O), neoclouds CoreWeave (CRWV.O), and Nebius Group (NBIS.O), and AI-exposed utilities and equipment suppliers such as GE Vernova (GEV.N), and Constellation Energy (CEG.O), recovered from deep losses in the last session.
Elon Musk-led Tesla (TSLA.O), and SpaceX (SPCX.O), were also up 2.1% and 5.5%, respectively, after dropping sharply in the last two sessions.
A jump in crude oil prices on Thursday had also pressured equities over concerns of energy-fueled inflation and prospects of higher interest rates by global central banks. Brent crude futures were slightly higher on Friday.
Despite the gains, oil prices were set for sharp weekly declines, putting the S&P 500 energy index (.SPNY), on track for a more than 11% weekly drop.
The S&P 500 was on pace for its worst weekly showing since March 2025, when concerns regarding the Trump administration's tariff policies had roiled global markets.
Among other stock movers, software firm Atlassian (TEAM.O), dropped 15.9% after reporting first-quarter results. Airbnb (ABNB.O), climbed 13.9% after the vacation rental platform raised full-year 2026 revenue growth forecast.
Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Editing by Shilpi Majumdar and Saumyadeb Chakrabarty
