Wall Street erased its whole post-election rally in one session, and oil climbed back towards $98. India’s six-day winning streak now faces its first real test.
Thursday was a great day to be an Indian equity investor. Friday morning, not so much.
While the Sensex was closing 2,009 points higher on Thursday, the mood on Wall Street was turning. By the US close, the Nasdaq Composite had crashed 5.52% to 24,315, its worst day since April 2025 and deep enough to put it in correction territory, more than 10% below its 6 October record.
The S&P 500 fell 4.36% to 7,353.73. The Dow, which had jumped 1,569 points on Wednesday, lost 1,833 points, or 3.44%, and gave back every point of its post-election gain.
All 11 S&P 500 sectors fell. On the New York Stock Exchange, losers outnumbered gainers by about seven to one. Wall Street’s fear gauge, the VIX, jumped about 70% to its highest level since March.
Chip stocks led the selling. Nvidia sank about 9.3%, and the Philadelphia Semiconductor Index dropped more than 12%. The trigger was the same fear that first surfaced on Wednesday: that a Democratic Congress will mean tighter rules on AI and less appetite for the enormous spending on data centres that has powered the technology rally. On Wednesday the market treated that as a problem for chipmakers only. By Thursday it had spread across the market.
The selling continued in Asia. Japan’s Nikkei 225 slid into a bear market, according to CNBC, and US futures were down another 0.4–0.6% in evening trade.
And oil bounced back
The second problem for India is crude. After Wednesday’s 9% crash, Brent rebounded about 3.6% on Thursday to around $98 a barrel and was firm again early on Friday. Eurasia Group, a political risk consultancy, cut its estimate of the chance of a US-Iran deal to 10% from 20%. Reports of tankers hitting mines in the Strait of Hormuz didn’t help.
Indian stocks have spent six sessions rallying on two assumptions: oil heading lower and global risk appetite heading higher. Overnight, both took a knock.
What Indian investors should watch today
Expect IT to take the hit. Indian IT companies earn most of their revenue from US clients, and a Nasdaq correction driven by AI fears is close to the worst headline for them. The Nifty IT index rose 2.42% on Thursday. Some of that could reverse quickly.
Don’t chase the oil trade blindly. Paint, tyre, airline and oil marketing stocks rallied hard this week on cheaper crude. With Brent back near $98, some of those gains rest on a price that has already moved against them.
The holiday calendar cuts both ways. Friday is Dhanteras. Muhurat trading is on Sunday evening, normal trading resumes Monday, and Tuesday is a market holiday. Traders who don’t want to hold positions through that patchy schedule may sell today.
For HNIs, it’s a good time to check hedges. After a 6,000-point move in six sessions, Nifty put options are probably the cheapest protection they have been in weeks. Anyone carrying large equity exposure into the holiday break should consider them.
Friday also brings the US jobs report for October, which will feed straight into expectations for the Fed’s December meeting.
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