Chips Rebound and Jobs Beat Forecasts as Fed December Hike Odds Jump to 78%

Wall Street ended a bruising week on a split note on Friday, November 6. The Nasdaq Composite rose 264 points, or 1.09%, to 24,579.42, and the S&P 500 added 0.31% to 7,376.86, while the Dow Jones Industrial Average fell 237 points, or 0.46%, to 51,285.73. For the week, the S&P 500 fell 2.7% and the Nasdaq 3.4% — the S&P’s worst week since June. The rebound was real but only partial: it came a day after the Nasdaq’s 5.52% plunge, its steepest in 19 months, and the S&P 500’s 4.36% drop, its worst since April 2025.

The day’s real driver was the October jobs report. US employers added 165,000 jobs, far above the 65,000 economists had expected, and August and September were revised up by a combined 84,000. Unemployment dipped to 4.1% from 4.2%, with hiring led by healthcare and professional and business services. Average hourly pay rose 3.1% from a year earlier — but with consumer prices up 3.7% in September, wages are still trailing inflation. That is the crux: a strong labour market gives the Federal Reserve room to keep fighting inflation rather than cutting rates to support jobs.

The rate maths moved fast. Traders lifted the priced probability of a December rate increase to about 78%, from roughly 67–70% before the report, and the 2-year Treasury yield climbed toward 4.52% while the 10-year settled at 4.86%. The Fed held rates at 3.75–4.00% at its October 28 meeting in a 10–2 vote, with two members dissenting in favour of an immediate hike. Its next decision comes on December 8–9, and Tuesday’s October inflation reading is the last major data point before that vote — a hot number would all but lock in a hike.

The chip rebound was the other half of the story. AMD surged 11.04%, Intel gained 7.71%, Micron rose 5.12% and Nvidia added 2.78%, lifting the Philadelphia Semiconductor Index 4.21%. The bounce followed reassurance that the data-centre build-out would continue despite midterm-election backlash against new data centres — Texas governor-elect Gina Hinojosa said the state would pause expansion until protections are in place. But Friday’s optimism had a caveat: reports that Microsoft is gradually ending its arrangement to rent AI computing power from Oracle, after fuelling the “new cloud” boom through deals with CoreWeave, Nscale and Nebius. Microsoft shares fell 0.99%.

The sell-off was global, and Friday showed how uneven the damage is. Japan’s Nikkei plunged 5.96% — its worst day since April 2025 — closing more than 20% below its June peak, in bear-market territory. South Korea’s Kospi fell 6.02% after an intraday drop of more than 8% triggered a circuit breaker, with SK Hynix down 10.44%. Taiwan’s TAIEX fell nearly 5%, landing 20% below its October high. India was the outlier: the Nifty 50 rose 2.01%. What to watch next: Tuesday’s US inflation report, Berkshire Hathaway’s results on Saturday, and whether Asia stabilises on Monday. The lesson of the week is that a portfolio spread across markets is not truly diversified if every holding rides the same theme — the US dollar and rate expectations now drive everything from stocks to gold, which fell 0.94% to $4,074.90 as yields rose. Our free forex course explains how rate decisions move currencies and commodities. (Not financial advice.)