AI data center stocks rallied in premarket trading. IREN up over 18%; Cipher Mining up 10%; Nebius, CoreWeave up over 6%; TeraWulf, Galaxy Digital up over 5%.
Optical stocks also jumped premarket. Credo up nearly 10%; Marvell, Astera Labs up over 8%; Lumentum up 7%; Coherent, Ciena up over 6%.
Traders on the world's financial markets go into next week hoping the storm engulfing tech stocks blows itself out and for no new escalation in the Iran war that sends oil prices surging again.
The Democrats' US midterm win is the latest hammer blow to the once-unstoppable Big Tech trade.
The Nasdaq's 5.5% slump on Thursday was its biggest since the Liberation Day rout of April 2025 and wiped $2.5 trillion off that one index alone.
Worries had already been intensifying about the stratospheric cost of the AI buildout. Now, post-midterms, the prospect of tougher regulations that slow everything down is hurting just as much.
Democratic wins in Texas and Georgia reflected the voter backlash against the data centres that are at the heart of the AI boom, but are also ugly and loud and require huge amounts of energy and water.
Some sense a compromise might be struck since AI has become a key economic driver. But if the rout resumes next week, growth worries will likely mount and plenty will be wondering whether something somewhere in the financial system tied to it all might break.
US data and the direction of oil prices over the next week could determine whether the Federal Reserve hikes its interest rates one more time before the year is out.
Tuesday's US consumer price index (CPI) — perhaps the most closely watched inflation measure — is expected to show a monthly rise of 0.3%, according to a Reuters poll, while Friday brings another key read on producer prices.
As it stands, traders are pricing in a more than 80% chance of a Fed hike at its December 8-9 meeting. That would take the federal funds rate — the primary driver of global borrowing costs — to 4.00%-4.25% and follow the Fed's first rise in three years back in September.
Then there's oil. Crude prices have pulled back this week after the Republicans' hammering in the US midterms stoked bets that President Donald Trump may look to de-escalate the Iran war. Any signal either way on that will be pivotal.