Dollar rises as AI stock selloff spreads and investors await US jobs data
The euro and sterling weakened against the dollar, while futures markets reduced the implied probability of a December Fed rate increase to around 65%.
Wall Street stages partial rebound after AI selloff
Chipmakers gained ground, but all three major US stock indexes remained on course for weekly declines as European and Asian equities fell.
US equities traded mostly higher on November 6, recovering some ground after a global selloff fueled by concerns that Democratic election victories would bring stricter regulation of artificial intelligence. The Nasdaq Composite advanced 1.4% and the S&P 500 added 0.71%, while the Dow Jones Industrial Average declined 0.08%.
Technology, communication services and consumer discretionary shares contributed to the recovery. Semiconductor stocks rebounded, with the Philadelphia Semiconductor Index climbing 4.2% following its sharpest daily fall since April 2025. Nvidia gained 3%, while AMD, Intel and Micron Technology rose between 5.5% and 10%.
Despite the gains, the three major US benchmarks were still heading for weekly losses. Gerry Sparrow, president and portfolio manager at Sparrow Capital Management, said uncertainty surrounding a shift from Republican to Democratic leadership at different levels of government was unsettling investors.
The AI sector was already facing concerns that spending on data centers and related infrastructure would constrain future returns. Texas Democratic governor-elect Gina Hinojosa said the state would introduce legislation to protect local communities from further large-scale data center construction.
Markets outside the United States remained lower. A 1% decline hit Europe's STOXX 600, while Japan's Nikkei and South Korea's KOSPI each fell about 6%. MSCI's All-World index slipped 0.52%, and its broadest Asia-Pacific share index excluding Japan dropped 3%.
US employment data showed a gain of 165,000 in nonfarm payrolls, exceeding expectations. Annual wage growth registered 3.1%, rather than the anticipated slowdown below 3%. The benchmark 10-year Treasury yield edged higher to 4.85%.
The dollar strengthened against major currencies. Against the dollar, the euro lost 0.68% to $1.1142. Gold's spot price declined 0.48% to $4,067.75.