Nasdaq 100 Had Its Worst Day Since 2020; Tuesday's CPI Now Decides the Rate Path

On Thursday 5 November the Nasdaq 100 fell roughly 6.4%, its worst single session since the COVID crash in March 2020. The broader Nasdaq Composite dropped about 5.5%, and the S&P 500 fell sharply as chip stocks led the sell-off. On Friday 6 November the Nasdaq Composite recovered 1.1% to about 24,579, but the rebound faded in the afternoon. Exact percentage figures vary by source, so treat them as approximate.

What happened

The trigger was a combination of an AI and semiconductor sell-off, fears about tighter AI rules after the midterm results, and a surprisingly strong jobs report. October payrolls rose by about 165,000 against expectations of roughly 59,000, and unemployment eased to 4.1%. That strength pushed up bets on a possible rate increase rather than a cut, and the 10-year Treasury yield moved near 4.86%. Higher yields hit long-duration growth stocks hardest.

Why it matters for traders

• A strong labour market is no longer simply good news for stocks. When it lifts rate-hike odds, high-valuation tech tends to fall first.
• Chip stocks were the epicentre. AMD rose about 11% on Friday, which shows how quickly the group can swing in both directions.
• The Dow held up far better than the Nasdaq, which points to a rotation toward value and defensive names rather than a broad market exit.
• Volatility of this size is a useful test of position sizing. A 6% index day can wipe out weeks of gains in a leveraged book.

What to watch

The key event is the October CPI release on Tuesday 10 November. A cooler print would ease rate-hike bets and could help growth stocks recover. A hotter print would reinforce the view that the Fed stays on hold for longer, with the risk of more pressure on the Nasdaq. Wednesday brings a bond-market holiday for Veterans Day, which can thin liquidity in Treasuries, so expect quieter trading in rates that day.

Educational content, not investment advice. Practise trading through a volatile CPI week risk-free in the Trading Titans paper trading app.