World shares traded mixed on Friday following heavy losses in technology stocks on Wall Street, while oil prices climbed to their highest levels since May amid concerns over the war with Iran.
Brent crude, the international benchmark, rose 0.8% to $114.02 a barrel, while US benchmark crude gained 1.1% to $100.60.
In early European trading, Germany's DAX fell 0.4%, France's CAC 40 dropped 0.6% to 7,765.74 and Britain's FTSE 100 declined 0.4% to 10,685.86.
Asian markets showed a mixed performance, with some recovering from early losses. Tokyo's Nikkei 225 slipped 0.3% to 62,693.16, while South Korea's Kospi gained 0.3% to close at 5,550.30. Hong Kong's Hang Seng advanced 0.7% to 23,093.37, and the Shanghai Composite rose 0.9% to 3,690.48. Australia's S&P/ASX 200 remained nearly unchanged at 8,795.20.
On Thursday, the S&P 500 dropped 1.2%, marking its worst session since July, while the Nasdaq Composite plunged 2.6%. Technology stock losses overshadowed gains across much of the broader US market, with most stocks advancing. The Dow Jones Industrial Average edged up less than 0.1%.
Investors have become increasingly concerned that the artificial intelligence boom could lose momentum as borrowing costs rise for companies building data centres and purchasing AI chips. Despite continued industry growth, fears that valuations have become excessive have fuelled market volatility.
Meta Platforms fell 7% after reporting quarterly revenue above analysts' expectations but weaker-than-expected profits. The Facebook and Instagram owner also announced plans to create a new class of stock to raise funds for AI investments and other expenses.
Tesla shares dropped 3.1% despite reporting stronger-than-expected summer profits, as revenue fell short of forecasts. Nvidia declined 4.4%, becoming the biggest contributor to the S&P 500's decline because of its enormous market value. CoreWeave, which borrows money to purchase Nvidia chips and rents computing capacity to customers, plunged 10.1% amid concerns about its debt.
Rising oil prices have added to pressure on equities. Brent crude surged 4% on Thursday and has risen from below $97 a barrel at the beginning of October as uncertainty over the Iran war threatens the normalisation of global energy supplies.
Meanwhile, concerns over mounting government debt and strained public finances continue to weigh on developed economies. Protests in France have increased pressure on the government to boost spending, potentially adding to its debt burden.
In the United States, high inflation, signs of economic resilience and debt concerns have recently pushed Treasury yields to levels not seen in decades.
However, yields fell sharply on Thursday as investors sought the relative safety of government bonds amid the technology sell-off. The yield on the 10-year Treasury dropped to 4.97% from 5.13% late Wednesday and more than 5.30% earlier this month.
The decline came despite data suggesting continued strength in the US economy. A report showed that fewer Americans applied for unemployment benefits last week, indicating that layoffs may remain limited.
In early Friday currency trading, the US dollar rose to 156.93 Japanese yen from 156.77 yen, while the euro slipped to $1.1203 from $1.1218.