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Wall Street ended a brutal week with a rebound in AI stocks. But the gains came too late to erase the damage.

Nvidia rose 2.8% on Friday. AMD jumped 11%. The Nasdaq gained 1.09%, while the S&P 500 added 0.31%. Yet the full week told a far different story.

The Nasdaq lost 3.37% over 5 trading days. The S&P 500 fell 2.68%, while the Dow slipped 0.94%. Thursday brought the worst damage. The Dow plunged 1,833 points, and the Nasdaq crashed 5.52% as investors sold AI stocks.

Friday's jobs report then added a new test. U.S. employers added 165,000 jobs in October, far above forecasts. The government also raised its August and September job counts by 84,000. Now Wall Street faces another major test. Fresh inflation data arrive Tuesday and could shape the Fed's next rate decision.

Friday, November 6

For the full week:

Three forces drove the week's trading. AI stocks faced heavy selling as investors feared that new rules could slow plans for data centers. High costs and the need for stronger profits added to those fears.

Friday's jobs report then showed that the U.S. economy remained firm. Hiring beat forecasts, while job gains from prior months were raised. That gave Wall Street mixed news.

Strong hiring helps firms grow sales. But it may also give the Fed less reason to cut rates while inflation stays high. The result was a week of sharp losses, followed by a small rebound.

Chip stocks bounced back Friday after Thursday's steep selloff. Nvidia gained 2.8%, while AMD jumped 11%. The Nasdaq rose 1.09%, ending the week on a stronger note. But the rebound followed heavy losses. On Thursday, Nvidia had fallen 9.3%, while AMD sank 17.3%.

The selloff came as investors feared that tighter rules and local pushback could slow plans for AI data centers. These sites need vast amounts of power, water, and land. Delays could lead firms to buy fewer chips and servers.

But no nationwide ban on AI data centers has passed. Friday's rebound showed that buyers still see value in AI stocks after sharp losses. It did not settle the wider concerns about high costs, new rules, or future profits.

The week's biggest shock came Thursday. Just 1 day earlier, the Dow had surged 1,569 points after the U.S. midterm elections. Then it plunged 1,833 points, more than wiping out Wednesday's gains.

The S&P 500 sank 4.36%, while the Nasdaq crashed 5.52%. The losses pushed the Nasdaq more than 10% below its October peak. That put the index in correction territory.

A correction means an index has fallen at least 10% from a recent high. Friday's rebound helped cut the losses, but it did not reverse the week's decline. The Nasdaq still finished down 3.37%.

The selloff showed how fast losses in the largest tech firms can spread across the market. Investors now want proof that billions spent on AI can lead to more profits and cash.

Friday's jobs report gave Wall Street better news about the economy. U.S. employers added 165,000 jobs in October, beating forecasts near 65,000. The jobless rate fell to 4.1%, from 4.2%.

The government also revised its job counts for August and September higher by a total of 84,000. That means hiring was stronger than first reported.

Health care, business services, and transport firms helped drive October's gains. Wages also rose. Average hourly pay climbed 0.4% for the month and 3.1% from a year ago.

The data showed that firms were still hiring despite high loan costs. That is good news for workers and businesses. But it may also make the Fed's next move harder.

The Fed held rates at 3.75%–4.00% at its last meeting. Friday's jobs report gave officials more proof that the economy remains strong. That can help company sales and profits.

But strong demand may also make inflation harder to slow. The Fed wants price growth near 2%. If prices stay high, officials may need to keep rates elevated.

High rates raise costs for homes, cars, and businesses. They can also hurt firms that need loans to build new projects.

That matters for AI. Large tech firms may have enough cash to fund new data centers. Smaller firms that rely on debt could face a harder path.

If loan costs stay high, some projects may take longer to earn enough money to cover their costs. The next inflation reports will help show whether the Fed has room to ease that pressure.

Oil gave Wall Street some help last week. U.S. crude ended Friday near $90 a barrel, down sharply from the prior week.

Brent crude also fell below $100 after trading above $115 in late October. The drop came as traders weighed hopes that fighting in the Middle East could ease. Lower oil prices can help firms cut costs.

Airlines spend less on fuel. Trucking firms pay less to move goods. Stores may save money on shipping. Those savings could also help families if gasoline prices fall. That matters for inflation. A lasting drop in fuel costs could help slow price growth.

But the war with Iran has not ended. Fresh supply threats could send crude higher again. For now, lower oil offers some relief as the Fed weighs its next move.

Tuesday, November 10, brings the October Consumer Price Index report at 8:30 a.m. ET. The report will show how much prices rose last month. Investors will watch whether lower oil prices helped slow inflation.

They will also look at rent, food, and service costs. Those prices can stay high even when fuel gets cheaper. A softer reading could ease fears of another rate hike.

A hotter reading could push bond yields higher and weigh on stocks. Friday, November 13, brings the Producer Price Index.

That report tracks prices received by U.S. producers. Together, the reports will give Wall Street a clearer view of inflation and what the Fed may do next.

Friday's rebound gave AI investors some relief. Nvidia rose. AMD jumped. The Nasdaq gained 1.09%. But the full week's results told a harder story. The Nasdaq lost 3.37%. The S&P 500 fell 2.68%. The selloff showed that investors are less willing to overlook the cost of AI growth.

Firms must spend billions on chips, data centers, and power before those projects can earn money. At the same time, the economy remains strong.

October's 165,000 new jobs and the 84,000 upward revision showed that hiring was stronger than expected. That creates a new test. Strong growth helps company sales. But it can also keep rates high if inflation remains above the Fed's goal.

Tuesday's price report could help decide which force matters more. Softer inflation may give stocks room to recover. Hot inflation could raise bond yields and add more strain to Big Tech.

The lesson is simple: Friday's rebound showed that buyers still want AI stocks, but the week's losses proved that high costs and high rates remain a threat.

Nvidia bounced back. AMD surged. Jobs beat forecasts. Yet the Nasdaq still ended the week sharply lower. Now Wall Street needs proof that inflation can slow while profits keep growing. That will be the next test for stocks.