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Oil rose above $114 a barrel for the first time since May on Friday, weighing on global markets already reeling from a sharp selloff in shares of major technology companies on Wall Street.
Brent crude, the international benchmark, rose 1.4% to $114.72 a barrel, extending its meteoric rise amid fears of a further escalation of conflict in the Middle East.
Soaring oil prices threaten to inflict more damage on the global economy, just as concerns about the sustainability of the AI boom and the sell-off of French sovereign bonds intensify.
The Nasdaq 100 closed 2.9 percent lower on Thursday after Meta’s explosive investment forecast heightened concerns about whether the historic – and increasingly debt-fueled – boom in AI investing would pay off.
That sparked a rush into safe-haven assets that drove U.S. Treasuries to their best day since 2023 on Thursday, sending the 10-year yield down 0.19 percentage points, as AI fears combined with another day of selling in riskier euro zone bond markets and rising crude prices.
“The swings of the last few weeks all collided at the same time,” said Jim Reid of Deutsche Bank.
As European and US markets stabilized on Friday, yields on 10-year Treasury notes rose 0.02 percentage points to 4.97 percent, while German Bunds, the euro zone’s safe asset, slipped 0.02 points to 3.32 percent.
The Nasdaq 100 was expected to open 0.2 percent higher on Friday. Futures tracking the S&P 500, which closed down 1.2 percent, were little changed.
The regional Stoxx Europe 600 index was down 0.1 percent in early trading, following a 1 percent decline yesterday.
Earlier, volatility in Asian stock markets saw South Korea’s Kospi index fall as much as 4% before recovering to trade 0.3% higher. The tech-heavy Nikkei 225 index fell 2 percent before paring some of its losses.
Safe-haven government bonds rebounded strongly in the region, with the yield on 10-year Japanese government bonds falling 0.08 percentage points to 2.8 percent.
“Global investors are testing the risk of hyperscalers and the AI story collapsing and looking for places to park their cash safely,” said a Tokyo-based currency trader.
The Kospi is down almost a fifth this month and is more than 40 percent off its June record, making it the world’s worst-performing stock market.
Thursday’s decline was led by memory chipmakers as Meta’s spending plans reignited doubts about the long-term viability of debt-financed AI infrastructure expansion. Samsung Electronics fell 4 percent, while SK Hynix fell 5 percent.
SK Hynix said Friday it would delist the U.S. listing of Solidigm, its California-based maker of Nand flash memory chips used to store data in electronic devices, blaming “recent capital market conditions and stock price trends.”
Shoki Omori, a fixed income strategist at Deutsche Bank, said concerns about the scale of hyperscalers’ capital spending and the debt raised to finance them had pushed investors toward safer assets such as U.S. Treasuries.
He cautioned, however, that the recent move toward Japanese government bonds did not yet represent a repatriation of Japanese assets.
China’s CSI 300 composite index fell 1.7 percent and remains in a bear market after falling 20 percent from its peak in late June.
Gn bussni
