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02.11.2026 10:15 AM
Stock market recovers after Friday's plunge

Futures climbed in Asian trading today after last week's tech-led sell-off. S&P 500 and Nasdaq 100 contracts were up at least 0.4%, and European futures also rose, pointing to a firmer cash open. Most names in the MSCI Asia-Pacific index gained, with Korea and Hong Kong in the green, while Japan lagged. Recall that on Friday, the Nasdaq 100 plunged by 3.5%, marking its worst day since June.

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What sparked the sell-off was tech earnings. Friday's drop confirmed investors are less tolerant of companies whose core businesses are slowing while AI spending accelerates. Disappointing results at Alphabet and Amazon renewed fears that AI investment is eroding cash flow for the very companies financing it. Defensive stocks and bonds were the beneficiaries; AI leaders suffered. The Cboe volatility index hit its highest level since April, demand for protective options rose, and stock correlations increased — though they remain well below the spikes seen in March when the United States and Israel attacked Iran.

Asia's response was mixed. Chinese shares rose after reports that financial regulators will meet banks and brokerages to discuss market support, and the People's Bank, the banking regulator, and the securities regulator are studying credit programs for buybacks. The CSI 300 climbed by 1.3% after a 2.9% drop last week, and the Star 50 tech index gained 2.8%. Conversely, Japan's Kioxia shares tumbled by 17% in Tokyo after a cautious memory-chip forecast, stoking concerns that the AI-driven surge is plateauing.

Morgan Stanley sees several "cleansing events" ahead that may temporarily reduce stock prices and create buying opportunities. Barclays says recent weeks do not mark "the end" of AI trading — this looks like a normal correction, similar to two pullbacks earlier in 2026, after which earnings strength ultimately prevailed.

Geopolitics eased a bit. Brent fell by 2.9% to $110.16/bbl after reports that Donald Trump wants more time for diplomacy with Iran before deciding on renewed strikes after the US elections, which improved risk appetite. Bitcoin rebounded after last week's drop tied to Binance's hack.

I expect US markets to open with a rebound today, but it is too early to call a durable reversal. Friday's hit to semiconductors was deep and will keep volatility elevated into the election and Nvidia's report. If oil stays below $110, the bounce could hold for a few sessions; if diplomatic talks break down, pressure on tech would likely resume.

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As for S&P 500 technicals, the immediate task for buyers is to overcome the resistance level of $7,633. That would signal upside and open a move toward $7,656. Holding $7,679 would further strengthen bulls' positions. If the price slides amid weaker risk appetite, buyers should defend around $7,607. A break below that level would likely send the index down to $7,574 and open the way to $7,544.

Jakub Novak,
Especialista em análise na InstaForex
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