On the last trading day of this week, U.S. tech stocks finally saw bottom-fishing, but "the key is to watch next week."

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This week, the US stock market experienced a dramatic pattern of first falling and then rising. The sharp declines over the first four trading days were met with a technical rebound on Friday, as bargain-hunting funds poured into tech stocks, helping the Nasdaq recoup its losses. However, next week's Nvidia earnings and a series of delayed economic data releases will be the key focus.

After the market opened on Friday, core AI stocks like Nvidia and Oracle fell to levels attractive to bargain hunters, and their prices rebounded sharply. The Nasdaq, which was down as much as 1.9% intraday, closed up 0.1%, marking the biggest intraday reversal since April. The S&P 500 rose less than 0.1% this week, the Nasdaq fell 0.5%, and the Dow rose 0.3%.

Besides bargain-hunting in tech stocks, technical factors also supported the rebound of major indexes like the Nasdaq on Friday. As shown in the chart below, the Dow Jones, Nasdaq, and S&P 500 all rebounded after touching their 50-day moving averages. The small-cap index found support after testing its 100-day moving average.

However, the sustainability of this buying-the-dip activity remains in doubt. Melissa Brown of SimCorp pointed out, “A real rebound may have to wait until government data starts being released again, so investors can better understand economic and inflation conditions. But genuine recovery will only occur if the economy continues to grow and inflation stops rising,” she said.

Nvidia's quarterly earnings next week (November 19) will be a key indicator to test whether there is room for AI trades to rise further. At the same time, a series of delayed economic reports, including September employment data scheduled for release on November 20, will influence market expectations for the Fed’s December meeting. Analysts believe the uncertainty over Fed rate cuts, combined with debates over tech stock valuations, is putting multiple pressures on the market.

This week, there were clear signs of sector rotation in the US stock market—investors shifted funds from this year’s main engine, AI concept stocks, to more defensive sectors like healthcare, materials, and energy. Companies related to OpenAI suffered significant declines; Oracle fell 6.9% during the week, and data center cloud service provider CoreWeave plummeted 26%.

Friday's bargain-hunting saved tech stocks

After the market opened on Friday, selling pressure in tech stocks finally triggered buying. The Nasdaq dropped as much as 1.9% intraday, but quickly recovered to close up 0.1%.

According to Dow Jones Market Data, this was the biggest intraday reversal for the index since the tariff turmoil in April. The S&P 500 also pared early steep losses, ultimately closing down less than 0.1%, while the Dow fell 0.7%, or about 310 points.

Nvidia’s rebound on Friday afternoon allowed the stock to close the week slightly higher, providing a relatively stable starting point for its earnings report next Wednesday.

Looking at this week’s trend, investors began to pull funds out of the AI sector, the main driver of the market this year, and instead rotated into more defensive industries. Healthcare, materials, and energy companies led gains in the S&P 500.

Meanwhile, companies involved in cycle trades related to OpenAI saw substantial declines. Oracle’s share price fell more than 9% this week, and data center cloud provider CoreWeave plunged by nearly 30%.

Ken Mahoney of Mahoney Asset Management said:

“We saw a pretty obvious rotation this week, mainly into healthcare and consumer staples, which appear to have bottomed. This is not what you want to see for AI trades or related stocks.”

Daniel Skelly, head of market research and strategy at Morgan Stanley Wealth Management, said:

“The recent market movement doesn't even qualify as a tech crash, but it might be a valuation reset for tech stocks.”

Next week’s focus: Nvidia’s earnings and a flood of economic data

Nvidia’s quarterly earnings report next Wednesday will be a key indicator of whether AI trades have further upside. Options traders expect a 6.2% two-way swing after the earnings release, the highest implied volatility in a year. Kyle Rodda of Capital.com says:

“Nvidia’s earnings will be a huge test for the market and AI trades. It could either ease concerns about AI valuations, or significantly intensify them.”

Next week, major retailers such as Walmart and Target will also report earnings, providing insight into consumer spending, the main engine of the US economy.

Additionally, with the US federal government ending the shutdown, investors will be greeted by a series of delayed economic reports in the coming weeks, including September jobs data scheduled for release on November 20, which will impact market expectations for the Fed’s December meeting.

Gennadiy Goldberg of TD Securities said:

“We expect the October jobs report to be weak and core CPI inflation to be under control, which should settle internal FOMC debates and support another 25-basis-point rate cut. However, the decision may be contentious, with likely more hawkish dissent.”

Although Fed officials spoke cautiously this week, Ulrike Hoffmann-Burchardi of UBS Global Wealth Management says:

“Ultimately, any decisions will depend on the data. Even if the official October jobs report does not include an unemployment rate, wage figures should still provide a good reflection of labor market health.”

Risk Warning and DisclaimerThe market involves risk, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account any individual user's specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate to their specific circumstances. Those who invest based on this article do so at their own risk. ```