Wall Street’s worst session since April 2025 did not stay in New York. Overnight Asia took the Nasdaq’s 5.5 per cent correction and ran with it: Japan’s Nikkei fell nearly 6 per cent into bear-market territory, Korea’s chip complex followed, and SoftBank was crushed again. US futures are trying a mild bounce into Friday, but the dial that settles whether yesterday was a one-day flush or the start of a deeper AI unwind is this afternoon’s US payrolls report.
The 60-Second Market View
Thursday’s US close was brutal. The S&P 500 dropped 4.36 per cent to 7,353.73, the Nasdaq Composite sank 5.52 per cent to 24,314.997 and entered a formal correction, and the Dow lost 3.44 per cent to 51,523.06. The VIX jumped nearly 70 per cent to 28.18. London’s FTSE 100 finished only 0.43 per cent lower at 10,782.66, while the German DAX was unchanged at 26,325.01.
Overnight the hangover went global. Japan’s Nikkei closed at 57,420.23, down 5.99 per cent and into bear-market territory. South Korea’s KOSPI fell 5.41 per cent to 5,092.38 after a worse open. Hong Kong’s Hang Seng slipped 1.06 per cent, Shanghai 1.14 per cent, and Australia’s ASX 200 0.68 per cent. Into the London morning, S&P futures sit near 7,388.50 (up about 0.1 per cent), Nasdaq 100 futures near 27,009 (up roughly 1 per cent), and Dow futures near 51,139 (down about 0.9 per cent). Brent is back near $99.96, gold has eased to about $4,052, sterling is around $1.3428 and the dollar index is near 101.76.
What Happened Overnight?
Asia’s tech-heavy markets opened in freefall and only partly stabilised. Reuters and AP both flagged a Nikkei that briefly sank around 7 per cent before closing near minus 6, with SoftBank down about 11 per cent and memory names such as Kioxia hit hard. In Seoul, Samsung and SK Hynix led early double-digit slides before the KOSPI settled around a 5.4 per cent loss. The Philadelphia Semiconductor Index had already slumped more than 12 per cent on Wall Street, so the Asia cascade was a second-order transmission of the same story: political risk around AI infrastructure after the Democratic midterm sweep, colliding with doubts that were already building about the return on enormous AI capital spending.
European futures cut initial losses into the London open. Oil firmed back toward $100 on Brent even as equities sold, and gold gave back some of this week’s surge. Bitcoin held near $75,700 after Thursday’s deeper slide.
The Big Story: Asia Catches the Nasdaq Correction Ahead of Payrolls
Yesterday was not a garden-variety risk-off day. Roughly $3 trillion was wiped off S&P 500 firms in a session that ranked as the worst since the Liberation Day tariff shock of April 2025. The Nasdaq’s move into correction territory — more than 10 per cent below its recent high — matters because the crowded AI trade had become the market’s organising idea. Once that idea wobbles, Asia’s chip exporters feel it first and hardest.
The political layer is new. Markets spent the midweek celebrating a Democratic sweep as gridlock that would limit fiscal fireworks. Within a session that cheer flipped into fear that a Democrat-led Congress would tighten the screws on AI data centres, energy use and capital deployment. That fear landed on a trade already nervous about whether the build-out pays for itself. SoftBank’s slide and the jump in its credit-default insurance overnight show how fast the leverage story reappears when equity confidence cracks.
The second-order map for London is rates plus risk appetite. A hot payrolls print this afternoon keeps December Federal Reserve hike odds alive — markets have been pricing roughly a 70 per cent chance of another 25 basis points — and that combination of tighter policy and a wounded AI narrative is an ugly mix for growth assets. A soft print eases the rates side of the squeeze even if the regulation story does not vanish. Consensus, per Dow Jones via CNBC, looks for about 59,000 jobs in October and an unemployment rate steady at 4.2 per cent, after September’s meagre 29,000 gain.
Oil near $100 is colour, not the lead. Brent’s bounce complicates the disinflation gift that cheaper crude handed the Bank of England only yesterday, but today’s equity tape will be written by Asia’s follow-through and the labour report, not the barrel.
FX
The dollar has firmed to about 101.76 on the ICE index as risk appetite cooled. Sterling sits near $1.3428, the euro near $1.1198, and the yen around 157.88. Against the euro, sterling is near 0.8335. A strong US jobs number typically supports the dollar and pressures cable; a weak one does the opposite. For UK traders the pound’s next move is less about Threadneedle Street — that hike is already done — and more about whether US rates reprice higher into December.
Equities
US futures show a fragile bounce attempt in Nasdaq overnight after the cash correction, while Dow futures remain soft. That split fits a market still arguing whether yesterday was forced selling in crowded AI names or the start of a broader de-rating. Europe will open with semiconductor equipment and luxury names in focus for Asia spillover. The FTSE 100’s relatively mild Thursday loss will not shield London if US futures reverse the bounce into the New York open. Bitcoin near $75,700 is tracking risk assets, not gold.
Bonds
US 10-year yields are near 4.835 per cent and the two-year around 4.47 per cent. That is not a full flight-to-quality bid, which tells you the market is still weighing sticky labour against equity stress. UK 10-year gilts finished Thursday near 5.15 per cent after the Bank of England’s hike; today’s gilt path leans on US yields and whether payrolls revive December hike pricing. If jobs come in hot, front-end US yields can rise even while equities stay under pressure — a classic late-cycle squeeze.
Commodities
Brent at $99.96 is knocking on $100 again after trading as high as $100.92 overnight, with WTI near $91.75. That firming oil tape sits awkwardly beside an equity risk-off session and removes some of the easy disinflation narrative from earlier in the week. Gold has cooled to about $4,052 on the futures contract, with spot near $4,045, after the earlier surge toward $4,150. Silver is softer around $51.46. Natural gas is little changed near $2.98.
Today’s Economic Calendar
13:30 GMT — US Nonfarm Payrolls (October), Unemployment Rate and Average Hourly Earnings. Why traders should care: the first hard labour print after the midterm-driven AI sell-off; a hot number keeps December Fed hike pricing alive and can extend the risk-off, while a soft number eases the rates squeeze even if regulation fears linger.
Levels Traders Are Watching
These are reference points, not predictions. On the S&P 500, 7,350 is the cash close to lean on, with futures hovering just above. For Nasdaq 100 futures, whether the bounce above 27,000 holds into the New York open is the near-term test. On the Nikkei, 57,400 is the fresh bear-market print Asia just accepted. Sterling around $1.34 is the cable line into payrolls. Brent at $100 is the psychological oil marker overnight, and gold near $4,050 is the pullback zone after this week’s spike.
Where This Leaves Us
The cleaner read is that Thursday priced a real crack in the AI narrative — politics plus returns — and Asia overnight confirmed the trade is global, not a Wall Street quirk. Futures bouncing a little into Friday does not repair that; it only buys time until the labour report. A soft payrolls number would argue yesterday was a flush inside a still-supported economy. A hot number would argue the market has to digest tighter policy and a wounded growth story at the same time.
That view would change if Nasdaq futures push through the bounce and reclaim more of Thursday’s damage before the data, if Brent breaks cleanly through $100 with a fresh supply scare, or if the unemployment rate jumps enough to force an immediate rethink of December hike odds. Watch payrolls and wages, Nasdaq futures, the Nikkei follow-through, sterling, and Brent. For beginners, the lesson is that a correction in the market’s favourite theme rarely stays contained in one time zone — Asia’s chip complex is often where the second-order bill arrives first.
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