Nasdaq futures make a small comeback after the tech wreck sends it into correction territory

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Hello, this is Leonie Kidd with today’s edition of Morning Squawk.

Blue, then green, then red. It’s been a colorful week for investors navigating the biggest swings in stocks since the tariff shock of April 2025. 

Friday looks set to see a small recovery in certain parts of the market. But Thursday’s declines represent a number of market milestones with the potential to impact sentiment long-term. 

The Nasdaq is in correction territory, after a massive AI-driven rout sent the index 5.5% lower. Futures point to a smaller comeback for tech stocks today, while it’s a mixed picture for the Dow and S&P.

In early trading, chip stocks and neocloud shares are sharply higher. 

But Thursday’s moves marked the steepest one-day declines since the April 2025 tariff shock. 

Here are some of the key stats: 

• The “Magnificent Seven” lost more than $1 trillion in aggregate market cap, with Nvidia leading the way at a loss of more than $440 billion, down 9%.
• The CBOE Volatility Index (VIX) — which hit its highest level since March 31 — gained 11.57 points for the biggest point gain since April 4, 2025

It was a deeply negative session in Asia, with a 6% decline for Japan’s Nikkei driving the index into bear market territory. South Korea’s Kospi also attracted selling pressure, with AI heavyweights Samsung and SK Hynix suffering double-digit declines. 

In Europe, the broader markets opened deep in the red, but chip stocks are avoiding some of the worst losses in early trading. 

• The bearish view: Blue Box AM’s William de Gale says the AI industry is ahead of expectations, telling “Squawk Box Europe,” that he’s “not sure the frontier model business is a good business, I think it may end up being a very, very expensive commodity business which is not a great place to be.”
• The bullish view: G Squared’s Victoria Green told CNBC “the AI trade, in my opinion, is not dead here… it’s a good discount.”
• IPO impact: The AI rout comes at an inconvenient time for Anthropic. CNBC’s Kate Rooney looks at how the jitters could impact appetite for this historic IPO amid a tough fundraising environment. 

The chip stocks are rebounding from Thursday’s sharp declines. 

Nvidia is one of the stocks moving higher, after falling over 9% in the session to turn negative year-to-date. 

• Scoop: CNBC’s Kai Nicol-Schwarz reports on how Nvidia’s Blackwell chips are being accessed by China’s AI lab Moonshot via Europe amid the uncertainty over the future of compute locations. 

Nvidia 3-month

The neocloud stocks are also big early gainers. 

During Thursday’s rout, CoreWeave fell over 9%, while Nebius closed down almost 15%. 

• Why it matters: CoreWeave is more than 20% off its 52-week highs. 
• Analysis: CNBC’s Jenny Lee takes a closer look at why the Democratic sweep could create a K-shaped AI trade with the neoclouds versus the hyperscalers. 

CoreWeave 3-month

Today’s big economic data point is October nonfarm payrolls, due at 8:30 a.m. ET. Economists are expecting growth of 59,000 jobs, after the shock 29,000 increase in September. The unemployment rate is forecast to hold at 4.2%. 

• What to expect: CNBC’s Jeff Cox says sparse jobs growth could be ok amid “a climate where a stagnant labor force reduces the need for outsized job increases to keep the jobless level steady.” Read more here.
• The Fed View: The central bank sees the labor market as being on a solid footing. Currently, the market is pricing a 70% chance of a 25 basis point interest rate hike in December. We’ll hear more from San Francisco Fed President Mary Daly on “The Exchange.”

Biotech giant Moderna will report earnings before the bell today, with analysts expecting a widening net loss for the third quarter. 

• Why it matters: Back in August, the stock soared 117% on a promising skin cancer vaccine trial. Shares subsequently fell after a leak of further trial data in October. 
• Shot of the stock: Shares in Moderna are up almost 330% over three months, and higher by 925% in the last year.
• Coming Up: “Squawk Box Europe” will speak with Moderna CEO Stephane Bancel. 

Jim Cramer explains why no AI stock seems safe from the market carnage

CNBC’s Jim Cramer said Thursday that uncertainty over the future of the data center build-out has made artificial intelligence stocks increasingly difficult to value, leading to the steep selling over the past two sessions.

“We don’t know what to pay for any of the stocks connected to the data center [trade] and that’s why this moment is so fraught,” the “Mad Money” host said.

— CNBC’s Jason Gewirtz, Jeff Cox, Kiff Leswing, Caleigh Keating, Sean Conlon and Jenny Lee contributed to this report.

John Melloy edited this edition.