Oil eases, bringing some respite to stocks and battered bonds

On Friday, world markets experienced a slight resurgence as oil prices fell following President Donald Trump's promise not to launch an attack on Iran before the upcoming midterm elections. However, investors remained cautious, considering the surge in technology company fundraising and elevated borrowing costs in major economies.

European shares began the day higher, with US stock futures indicating potential gains later in the day. Brent crude futures decreased to $103.50 per barrel, down from a 4% surge the previous day. In Asia, the MSCI's broad Asia-Pacific index outside Japan rose 0.5%, but still headed for a weekly decline of around 0.7%. Japan's Nikkei remained unchanged.

Chip stocks continued to draw attention due to concerns over OpenAI, with reports suggesting the company's September revenue was almost $50 billion, less than initially anticipated. Investors are becoming more selective in valuing AI companies amid renewed demand for government bonds offering elevated yields. US Treasury yields rose slightly after a dip on Thursday, when a sale of 30-year bonds received strong investor demand.

European borrowing costs remained relatively low, driven by worries about inflation and France's fiscal situation. The premium for 10-year French debt over German Bunds was about 136 basis points, likely to narrow further. Big tech firms, including SpaceX, Broadcom, and Oracle, were in the process of raising billions to acquire AI chips.

Some companies, like Firmus, had to postpone their IPOs due to market volatility and opted for a private fundraising round instead. The dollar remained strong as the euro faced a fifth consecutive weekly decline, approaching a 17-month low amid concerns over French debt. Gold prices increased by more than 1% to around $4,191 an ounce, benefiting from a weaker US dollar and reduced oil prices.