NFP data in focus as Dow Jones futures decline after sharp Wall Street sell-off

April 2025 was the last time major US indices recorded steeper one-day losses. US index futures now show a mixed picture.
A 5.5% slump sent the technology-heavy Nasdaq into official correction territory as concerns grew over stricter AI regulation.
Thursday's steep market sell-off was led by AI hardware and semiconductor heavyweights, including Nvidia, AMD and Micron.

Dow Jones futures are down 0.85%. They trade near 51,170 in early European trading on Friday. By contrast, S&P 500 futures edge up 0.06% to around 7,390, while Nasdaq 100 futures gain 0.90% to approximately 26,990.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Following a sharp Wall Street sell-off, US equity futures show no clear direction. Growing fears that Democrats could tighten regulation of the artificial intelligence sector drove the major indices to their largest one-day losses since April 2025, when tariffs triggered market turmoil.

Thursday's regular trading session saw the Nasdaq Composite lose 5.5%, compared with declines of 4.4% for the S&P 500 and 3.4% for the Dow. The technology-heavy Nasdaq ended up more than 10% below its recent high, marking an official return to correction territory.

Fears that Democratic policies could curb data centre expansion concentrated selling pressure on AI infrastructure companies. Semiconductor and memory stocks suffered particularly steep declines, including chipmakers Nvidia, AMD, Micron and SanDisk.

Attention now turns to the forthcoming US Nonfarm Payrolls (NFP) report. Traders expect the release to be pivotal in shaping market expectations for the December policy decision by the Federal Reserve (Fed).

AI stocks: key questions

How is artificial intelligence defined?

As an academic discipline, artificial intelligence aims to reproduce human cognitive functions, logical understanding, perception and pattern recognition in machines. Commonly shortened to AI, the field encompasses artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. Its ultimate objective is artificial general intelligence, or AGI: a machine capable of solving arbitrary problems without having been trained to address them.

How is AI used in practice?

Artificial intelligence has a broad range of applications. Among the best-known are generative AI platforms, including ChatGPT and Google’s Bard platform, which are trained on large language models (LLMs) to respond to text-based questions. With Midjourney, users supply text prompts from which the programme creates original images. Probabilistic techniques underpin other AI applications that assess an entity's characteristics or how it is perceived. For example, Upstart’s lending platform assesses applicants' creditworthiness through an AI-enhanced credit rating system, searching the internet for information about their careers, wealth profiles and relationships. Elsewhere, AI draws on extensive databases of scientific research to propose potential new pharmaceuticals for laboratory testing. Content aggregators such as YouTube, Spotify and Facebook collect and organise information about users' viewing habits, allowing AI applications to recommend personalised content.

Which stocks offer exposure to AI?

Semiconductor company Nvidia (NVDA) produces AI-focused computer chips as well as some of the platforms engineers use to develop AI applications. Because it supplies the tools needed for further AI applications, many supporters regard Nvidia as a picks-and-shovels investment in the AI revolution. A “big data” analytics business, Palantir Technologies (PLTR) holds major contracts with the US intelligence community. Its Gotham platform helps that community examine data, identify intelligence leads and support pattern recognition. Large corporations use its Foundry product to monitor employee and customer data for predictive analytics and anomaly detection. Microsoft (MSFT), meanwhile, holds a substantial stake in OpenAI, the privately held creator of ChatGPT. OpenAI’s technology has been incorporated into Microsoft's Bing search engine.

Could AI fuel a fresh stock market bubble?

Many AI-linked shares started climbing after ChatGPT became publicly available in late 2022. Over the six months after its release, Nvidia, for example, gained well over 200%. Wall Street commentators quickly questioned whether another technology bubble was taking hold. Stanley Druckenmiller, the well-known investor with major holdings in both Palantir and Nvidia, argued that bubbles do not last just six months. In his view, if enthusiasm for AI turned into a bubble, extreme valuations would persist for at least two and a half years or longer, as they did during the DotCom bubble of the late 1990s. As of mid-2023, the best assessment was that the market was not in a bubble, at least for the time being. Although Nvidia then traded at 27 times forward sales, analysts forecast exceptionally strong revenue growth for years ahead. For comparison, the NASDAQ 100 traded at 60 times earnings at the DotCom bubble's peak, against 25 times earnings in mid-2023.