Stock futures fall after Nasdaq correction and Japan's Nikkei 225 enters bear market

Stock futures declined on Thursday evening following a punishing sell-off in artificial intelligence shares that pushed the tech-heavy Nasdaq into correction territory. Traders were also preparing for a crucial October payrolls report scheduled for Friday morning. S&P 500 futures fell 0.6%, while Nasdaq-100 futures slid 0.8%. Contracts tied to the Dow Jones Industrial Average dropped 291 points, or 0.6%. The downturn followed a heavy selling session on Wall Street where the three major averages recorded their worst performances since April 2025. The Nasdaq Composite plummeted 5.5%, closing more than 10% below its recent high. The S&P 500 lost 4.4%, and the Dow fell over 1,800 points. All eleven sectors of the S&P 500 closed lower, with artificial intelligence infrastructure companies facing the sharpest declines.

Political developments contributed to investor anxiety. Recent Democratic victories in the House and Senate, along with key governorships including Texas, triggered concerns about a potential slowdown in data center construction. Texas Governor-Elect Gina Hinojosa stated during a CNN interview that while the state could maintain a working relationship with Elon Musk, deals would be conducted on state terms, and called for a pause on data center expansion until protective measures are established. Shares of Micron Technology and Advanced Micro Devices each plummeted 17%, while CoreWeave slid 10%. Nvidia dropped 9%, erasing its gains for the year, and major tech juggernauts shed over $1 trillion in aggregate market cap. President Donald Trump posted on Truth Social that the stock market suffered one of its worst days in history based on election results.

Stock futures drop and Asian markets tumble after a punishing AI sell-off sends the Nasdaq into correction territory.

Asian markets and upcoming data

In the Asia-Pacific region, markets opened sharply lower on Friday, tracking the overnight losses on Wall Street. South Korea's Kospi plunged more than 8% to fall below the 5,000 mark, triggering circuit breakers with trading suspended for 20 minutes, while the small-cap Kosdaq shed over 7%. Japan's Nikkei 225 dropped more than 6% and entered bear market territory, falling more than 20% below its June peak. Chip-related stocks led the declines in Japan, with Advantest plunging 12% and SoftBank Group shedding 11%. Tokyo Electron dropped nearly 9% and Kioxia Holdings fell 11%. Meanwhile, market participants awaited the upcoming October payrolls report, with Dow Jones consensus estimates projecting 59,000 jobs added and the unemployment rate holding at 4.2%.

Victoria Greene, chief investment officer at G Squared Private Wealth, told CNBC that the pullback offers a buying opportunity. She noted that the artificial intelligence trade remains viable and represents a discount, particularly in memory stocks facing capacity constraints. However, the sweeping market correction highlights the sensitivity of global financial indexes to regulatory shifts, political outcomes, and capital expenditure in the technology sector.

Why it matters

This broad market correction impacts global investors by exposing vulnerabilities in technology-heavy portfolios, particularly regarding artificial intelligence infrastructure and chip manufacturing. The sudden downturn in Wall Street and Asian indexes alters investor sentiment and highlights how political shifts and regulatory proposals can immediately influence high-growth sectors.