Chips bounce and Dow slips as hot jobs lift December hike odds

Iran sent the United States a proposal concerning its nuclear programme through Qatar on Thursday, a senior Iranian official told Reuters, and Washington was said to be reviewing it. The same day, Iran's top security official, Mohsen Rezaei, said in Moscow that Tehran had communicated seven conditions to Washington and would neither negotiate nor reopen the Strait of Hormuz until they were met. The conditions named in the reporting are the lifting of United States sanctions, the release of frozen Iranian assets, and war reparations. A separate draft arrangement described by Axios, under which the Strait would reopen before nuclear talks resumed, is reported, not confirmed, and it is not clear whether it is the same proposal the Iranian official said had been sent.

On Friday, the Islamic Revolutionary Guard Corps said two more oil tankers caught fire in the Strait of Hormuz after striking mines, a claim no independent maritime authority had confirmed. The vessels were not named and no flag state was disclosed. The claim follows similar IRGC statements on each of the past three days, none of which the Joint Maritime Information Center or United States Central Command has substantiated. Separately, Reuters reported that the Greek-operated, Marshall Islands-flagged product tanker MT Velos Sapphire was struck by two unidentified projectiles about 50 nautical miles north of Madinat ash Shamal, Qatar, and United Kingdom Maritime Trade Operations reported a tanker explosion at about 22:00 GMT on Thursday, roughly 16 nautical miles east of Khasab, Oman. Those incidents are reported, not independently confirmed by the Ledger.

Stepped-up diplomatic efforts and the Democrats' midterm win raised hopes for a negotiated solution to the Middle East conflict, sending oil lower, and President Trump acknowledged the Iran war contributed to Republican losses, according to the Journal's oil coverage. Iran's Foreign Minister Abbas Araqchi held separate phone calls with his Saudi and Qatari counterparts on Friday, and Saudi Arabia warned of danger near its Red Sea oil export hub of Yanbu as Houthi attacks on the kingdom continued. For markets, the distinction between a claim and a confirmed incident remains the whole story: oil swung above $100 on the headlines and faded as the conditions hardened, and the Strait stays closed until Tehran's terms are met, in Rezaei's own words.

Europe closed lower across the board on Friday. The German DAX fell 1.92 percent to 25,820.37, France's CAC 40 fell 0.81 percent to 8,139.01, the FTSE 100 fell 1.01 percent to 10,673.93, Spain's IBEX 35 fell 0.60 percent to 19,369.49, and Italy's FTSE MIB fell 0.90 percent to 50,052.95. The pan-European STOXX 600 fell about 1.6 percent, its steepest one-day drop since July, wiping out its gains for the week and ending about 0.2 percent lower on the week, according to Reuters. Media, health care and retail stocks each fell more than 2 percent. Teleperformance, a French customer-service outsourcing firm, sank 18 percent after cutting its full-year revenue growth outlook. European chip stocks rose in morning trading even as the indexes fell, with ASML up 2.64 percent at 09:09 UTC, a day after closing 6.55 percent lower.

Friday in Asia was the rout at its worst. Japan's Nikkei 225 fell 5.96 percent to 57,434.77, its third-largest single-day point loss on record, and is now about 21 percent below its June record peak, in bear market territory, after falling 11.17 percent over five straight sessions. South Korea's KOSPI fell 6.02 percent to 5,059.69, after plunging more than 8 percent intraday and triggering a 20-minute trading halt, with weekly losses of about 12 percent. Taiwan's Taiex fell 4.50 percent to 39,701.64. China and Hong Kong fell less, and India went the other way entirely: the Sensex jumped 2.17 percent to 81,028.02 and the Nifty 50 rose 2.01 percent to 25,030.35, extending a seven-session winning streak and a weekly gain of about 9 percent.

Despite Friday's losses, Europe still leads the United States for the year: the STOXX 600 holds a year-to-date gain of more than 10 percent, against just over 7 percent for the S&P 500. The week's damage was limited in Europe precisely because the region carries less exposure to artificial intelligence stocks than Asia or Wall Street, and that exposure gap is now the pattern to watch: the same trade that lifted the year is the one doing the damage this week.

The 10 year Treasury yield closed at 4.867 percent on the Journal's ticker, up about 3 basis points from Thursday's 4.8408 percent close, while the 2 year yield rose about 5 basis points to 4.528 percent. The 30 year yield edged up 1 basis point to 5.262 percent, and the spread between the 2 year and 10 year yields narrowed to 33.5 basis points from 37.1 basis points the previous session, according to Reuters. For the week, the 10 year yield still posted its fifth straight weekly decline, a reminder that Friday's rise only partly unwound Thursday's haven rally.

Futures markets priced about a 75 percent chance of a December rate increase after the report, up from 67 percent on Thursday, per the CME FedWatch tool, with LSEG-based measures putting the odds near 78 percent, according to Reuters. Lindsay Rosner of Goldman Sachs Asset Management said the payroll number "removed the traffic light at the December intersection for the Fed." The Federal Reserve held its target range at 3.75 percent to 4.00 percent at its October meeting on a 10 to 2 vote, and the next decision is due December 8 to 9. One more jobs report, on December 4, and October consumer prices, on Tuesday, November 10, arrive before it.

The University of Michigan's preliminary November consumer sentiment index rose to 51 from 48 in October, against 47.5 expected, and one-year inflation expectations cooled to 4.3 percent from 4.7 percent. St. Louis Federal Reserve President Alberto Musalem said people remain concerned about inflation at the current level, adding that inflation expectations remain anchored and that current excess inflation is due to energy shocks and the artificial intelligence buildout. In Canada, the 2 year yield fell 3.3 basis points to 3.123 percent, about 139 basis points below the equivalent United States rate, after a weak Canadian jobs report cooled expectations for Bank of Canada hikes. The Bank of Canada, which raised its overnight rate to 2.50 percent on October 28, also decides on December 9.

West Texas Intermediate settled at $90.83 a barrel, up 0.34 percent, and January Brent settled at $98.32, up 0.03 percent, with both benchmarks down about 13 percent on the week, according to the Journal. Brent lost $15.11 a barrel on the week, or 13.32 percent, the steepest weekly fall since the start of the COVID-19 pandemic, according to Dow Jones Market Data. Brent crossed $100 early on Friday on the tanker headlines, then faded. JPMorgan estimated the conflict since late February has cut oil demand by about 3.3 million barrels a day, with China down 1.3 million and India down 1.2 million, according to the Journal.

December gold futures settled at $4,074.90 an ounce, down 0.94 percent, holding a weekly gain of 4.60 percent on the front-month contract, and spot gold closed near $4,068 an ounce. December silver settled at $51.942 an ounce, down 0.83 percent, for a weekly gain of 5.51 percent. Copper traded near $6.26 a pound, down 0.16 percent on the Journal's 5:26 p.m. EST quote, and three-month London copper stood at $13,745 a metric ton, down 0.2 percent, its lowest since late July, on track for a weekly loss of nearly 3 percent. Natural gas settled at $2.998 per million British thermal units, up 1.73 percent, after reclaiming $3.00 during the session on colder forecast revisions.

Bitcoin traded near $76,000 late on Friday, after dipping to a 10-week low near $74,900 during the session. The dollar rose with the hike odds: the dollar index stood at 102.28, up 0.72 percent, and the Canadian dollar fell to a nearly three-week low, with the Bank of Canada daily reference rate at 1.4113 per United States dollar, up 0.89 percent on the day, or 70.87 United States cents. For the week, the loonie was on track to lose nearly 1 percent, after three straight weeks of gains.

The PHLX Semiconductor index rose 4.21 percent to 9,390.25, with AMD up 11.04 percent to $449.04, Nvidia up 2.78 percent to $186.64, Intel up 7.71 percent to $56.28, Micron up 5.12 percent to $690.00, Qualcomm up 5.5 percent, and Broadcom up 0.74 percent to $293.69, according to the Journal and Finnhub market data. The bounce is partial: the chip index remains about 29 percent below its October 6 level, and AMD and Micron are still down more than 20 percent on the month. Vivek Arya of Bank of America wrote on Friday that indiscriminate selling of chip stocks on artificial intelligence spending concerns could start to run its course by early 2027, with clarity on data-center regulation helping stabilize the group.

The power names did the sorting on earnings. Vistra reported third-quarter net income of $1.14 billion, up from $652 million a year earlier, on revenue of $6.35 billion, up 28 percent, with ongoing operations adjusted EBITDA of $2.378 billion, up more than 50 percent, and raised its 2026 guidance to $7.1 billion to $7.5 billion while introducing 2027 guidance of $7.7 billion to $8.5 billion. The shares rose 10.55 percent. Oklo reported a third-quarter net loss of $41.75 million, or $0.22 a share, wider than the $29.72 million loss a year earlier, on $1.86 million of revenue, its first revenue, from acquired service operations, and the shares rose 22.66 percent to $23.55. TeraWulf reported third-quarter revenue of $76.2 million, up 51 percent from a year earlier, with high-performance computing lease revenue of $63.0 million, about 83 percent of the total, and net income of $709.9 million, driven by a $728.4 million non-cash gain on warrants, with adjusted EBITDA of negative $12.8 million, and the shares rose 12.80 percent to $11.37.

The market paid for raised outlooks and punished cuts. Airbnb closed at $189.99, up 11.67 percent, after reporting third-quarter earnings of $3.16 a share against $2.85 expected, revenue of $4.87 billion against $4.75 billion expected, and a new $12 billion buyback. Moderna rose 5.27 percent to $254.19 after beating third-quarter estimates and raising its full-year revenue growth outlook to 15 percent to 25 percent. Axon fell 18.18 percent to $313 after missing third-quarter estimates and cutting its 2026 revenue guidance on drone deployment delays, and DraftKings fell 21.30 percent to $18.51 after missing estimates and cutting its full-year outlook on prediction-market costs. Atlassian fell 16 percent after a quarterly update late on Thursday raised cloud-revenue concerns, according to the Journal. CoreWeave rose 6.28 percent to $46.40 and Iren rose 20 percent, with Nebius, GE Vernova, Vertiv and Eaton also gaining as data-center power suppliers.

Two reported items sit apart from the session. The Journal reported that Anthropic is aiming for an initial public offering the week before Thanksgiving, raising up to $100 billion at about a $1.5 trillion valuation, but three major investors say the valuation will likely need to come down, one putting it closer to $1 trillion. That is reported, not confirmed. The Journal also reported that the SpaceX board is weighing a possible merger with Tesla, and that Google executive Don Harrison stepped down from the SpaceX board on Friday. Tesla rose 4.23 percent to $358.22. The merger consideration is reported, not confirmed.

Compare Friday to the last four sessions and the shape is a rally, then a rout, then a split. Monday split the tape, with the Dow up 0.41 percent and technology down. Tuesday split it again, with the Nasdaq up 0.83 percent and the S&P 500 up 0.36 percent, but the Dow down 0.38 percent. Wednesday reversed the split and then some, with every major index rising together and the Dow up 3.03 percent. Thursday reversed Wednesday by more, with the Dow down 3.44 percent, the S&P 500 down 4.36 percent in its worst day since April 2025, and the Nasdaq down 5.52 percent into correction. Friday reverses Thursday only in part and only in one place: the Nasdaq and the chip index rebound while the Dow falls, Asia's chip markets enter bear markets, and India rallies on its own.

The chain linking the drivers runs in order. First, politics: the midterm sweep first lifted broad equities on gridlock, then turned on the chip and data center trade as oversight was priced in, and on Friday the chip leg is doing the work in both directions, down hardest in Asia and bouncing hardest in the United States. Second, oil: Brent's fall from $113.43 last Friday to $98.32 is a drop of $15.11 in a week, and Friday's swing above $100 and back below it shows the floor is set by diplomacy headlines, not by inventories. Third, rates: a hot jobs report on a morning of falling equities is the hardest combination for the Federal Reserve's December decision, because strong hiring and strong wages argue for the hike that the equity market has spent the week fearing, while Canada's weak report argues the opposite for the Bank of Canada on the same day. Fourth, earnings: Vistra, Airbnb, and Moderna all beat or raised, and the market is now paying for revenue already booked, not for the infrastructure spending that might produce it later.

The week also carried a quieter signal about who was selling. JPMorgan estimated leveraged exchange-traded funds sold more than $60 billion of equity exposure this week, according to the Journal, and technology credit-default spreads stood at five-year highs. That is forced selling and hedging, not a single verdict on artificial intelligence demand, and it fits a bounce that is partial rather than decisive. What would change the reading is Tuesday's consumer price index: a cool print would let the chip rebound run and soften the December hike case, a hot print would lift yields back toward 5 percent and turn the hike from backdrop into headwind. If the Strait of Hormuz produces a confirmed escalation, oil's $98 level becomes a floor to test, not a relief to enjoy.