US technology shares recovered only a fraction of their losses on Friday after a sell-off wiped trillions of dollars from market values, with investors weighing tighter regulation of artificial intelligence against doubts about whether vast spending on the technology will pay off.

The Nasdaq Composite rose 1.1%, following a 5.5% fall. The S&P 500 gained 0.3%, while the Dow Jones Industrial Average, broadly flat during trading, finished 0.4% lower. Nvidia, SpaceX and Tesla were among companies that regained some ground after losing hundreds of billions in value.

The rout began in the US on Thursday, hitting chip and semiconductor businesses particularly hard, before spreading to Asia and Europe. South Korea’s Kospi closed 6% lower on Friday, with SK Hynix falling more than 10%. Germany, France and Spain also recorded declines.

Britain’s FTSE 100 fell 1.01%. UK traders were also assessing the Bank of England’s interest-rate increase and its signal that another rise could follow to curb inflation.

Part of the technology sell-off reflected concern that the Democrats’ sweeping midterm election victory would slow AI development. The party won both houses of Congress and key state contests in places competing for data centres; several Democratic candidates campaigned for new rules governing AI and those facilities.

President Donald Trump reiterated his support on Friday for what he calls “super intelligence”, saying only “foolish leadership” would “say no to the riches they bring”.

Russ Shaw, founder of Tech London Advocates, interpreted the election result as a demand for a rethink. An AI supporter himself, he expects intense congressional scrutiny and said companies, particularly in the US, were failing to explain the technology’s benefits effectively.

Pierre Baqué, chief executive of AI platform Neural Concept, called the sell-off a “necessary market correction”, reflecting legitimate concerns about infrastructure spending. He urged greater financial discipline and said the technology must demonstrate widespread economic value. That concern is distinct from the prospect of tighter regulation: support for AI does not necessarily justify every investment in it.

Stronger-than-expected US employment figures offered a counterweight. Employers added 165,000 jobs, more than twice analysts’ expectations and above the average monthly increase. Unemployment eased from September’s 4.2% to 4.1%; the Bureau of Labor Statistics said it had stayed between 4.1% and 4.3% since March.

Premier Miton’s chief investment officer, Neil Birrell, said economic strength suggested market fears might overstate risks to the real economy. AJ Bell’s head of markets, Dan Coatsworth, remained focused on whether the rebound would last, saying trading after the weekend could give a clearer indication.