Stocks fall at least 3% in post-election sell-off before NASDAQ rebounds Friday

Employers add 165,000 jobs in October, far above forecasts

A sell-off that started with computer chipmakers knocked all the major U.S. stock indexes down at least 3% on Thursday, NPR’s Scott Horsley reported Friday, and the tech-heavy NASDAQ ended the day in correction territory, down more than 10% from its recent high.

Horsley described a market that has been on “a rocky ride.” Stocks soared on Wednesday as investors began to digest the results of this week’s election, but by Thursday, “digestion had turned to indigestion,” and a big sell-off erased the previous day’s gains “and then some.”

The downturn, Horsley said, started with computer chipmakers but didn’t stop there. He said investors have been questioning whether the artificial intelligence boom has been overblown and needs to be scaled back — doubts amplified when voters across the country showed they want more restrictions on data centers.

Early trading Friday morning showed a bit of a rebound in the NASDAQ, which had regained a little less than 2% of that decline by the time Horsley checked the board, but the Dow had fallen further. Investors, he said, are still jittery.

The sell-off came after this week’s midterm elections. Introducing the segment on NPR’s morning program, host A Martínez said rising prices and paychecks that are not keeping pace made for “a combustible combination this week” in the midterm elections, and host Leila Fadel said “voters took out their frustrations at the ballot box” before Thursday brought what she called “a similar rout in the stock market.”

The economic backdrop on Friday morning was a stronger-than-expected October jobs report. The Labor Department said employers added 165,000 jobs during the month, far more than economists’ expected gains of around 59,000 jobs, and job gains for August and September were revised upward, Horsley reported. The hiring was uneven: hospitals, factories and transportation companies all added jobs last month, while restaurants and construction companies shed workers.

The unemployment rate inched down just a bit, to 4.1%. The FRED U-3 unemployment series, a separate data set, listed 4.2% as of Nov. 6. Horsley said that so long as the unemployment rate remains low like that, the Federal Reserve is able to focus its attention on fighting inflation.

Inflation, meanwhile, remains stubbornly high — which Horsley said is “a big reason for the outpouring we saw in this week’s election.”

There was a modest uptick in wage growth last month. Average wages in October were up 3.1% from a year earlier, a slightly bigger annual increase than the previous month. But Cory Stahle, an economist with the Indeed job-search company, said that is still probably not enough to keep pace with rising prices.

“Which is really frustrating at a time where gas prices are higher,” Stahle said. “Grocery prices are still high for many people. These workers are losing ground right now. The longer it wears on, the more and more they’re going to feel that.”

Horsley said the best way for workers to boost their pay is often by switching jobs, or at least acting like they might switch, so employers pony up more. He said it is encouraging to see a little more turnover in the job market, but “we’ve still got a ways to go before workers start to see any real increase in their buying power.”

One silver lining, Horsley said, is that mortgage rates have inched down just a little bit, although they remain high — north of 7% for the average 30-year home loan. High mortgage rates have been a real drag on the housing market, he said.

Construction companies have been able to stay busy with data-center projects, Horsley said, but the industry still posted a small drop in construction jobs last month.