Shares of U.S. semiconductor companies rallied before the opening bell Friday, with Micron surging 9.2% and Nvidia gaining 5% as traders sought to buy the dip after a massive retreat in technology stocks. The bounce in early trading helped the chip sector recover approximately $500 billion in market capitalization and lifted Nasdaq-100 futures by about 1.5%. The recovery follows a record-breaking session on Thursday when the Nasdaq-100 dropped 6.4% and the CBOE Volatility Index jumped 70%, its third-largest single-day percentage gain since 1990.
The rout was driven by a rapid repricing of the AI investment cycle amid concerns over excessive valuations and data-center restrictions, resulting in a near $2.5 trillion loss in market value for the Nasdaq Composite. Despite the Friday morning rebound, UBS strategist Gerry Fowler warned that the gains may be tentative and based on thin futures markets. Fowler noted that trend-following quantitative funds remain heavily exposed to equities and may be forced to further reduce their positions if the downturn continues.