Stocks slip as dollar heads for weekly loss

Global stocks dipped modestly on Friday as markets settled following a significant tech-driven sell-off, while the dollar faced a weekly decline. Markets had been unsettled this week due to concerns over rising interest rates and the debt-backed financing supporting the AI boom, leading to losses in technology and chip stocks. Traders increased expectations for additional US rate hikes after releasing inflation data on Wednesday, prompting a shift towards Treasuries and government bonds.

On Wall Street, the S&P 500 and Nasdaq were trading lower, targeting weekly losses, while the Dow was slightly down but still expected to gain weekly. Technology and communication services were the main drivers of the decline, with utilities and energy stocks being the top gainers. CoreWeave's shares dropped 13% and were on track to lose nearly 26% that week due to heightened investor scrutiny over financing for the large-scale AI infrastructure expansion.

The Dow Jones Industrial Average fell 0.57%, the S&P 500 lost 1.3%, and the Nasdaq Composite fell 2.3%. The MSCI World Equity Index declined by 0.54% and was set for a weekly loss. European stock indices, less affected by the Thursday sell-off, rose, with the STOXX 600 increasing by 0.72%. London's FTSE 100 gained 0.38%. The dollar index dropped 0.21%, marking the first weekly decline after four weeks of gains, as lower Treasury yields diminished the currency's attractiveness.

Warnings of further AI-related troubles could further weaken the dollar, according to analysts. The euro rose slightly, while the Japanese yen weakened against the greenback. European government bond yields edged higher, while US bond yields rebounded from earlier declines. However, yields remained relatively low as investors sought the safety of government debt amid concerns over AI-related companies' financial situations.

G7 bond markets were set for their strongest weekly performance since late May. Crude oil prices rose 3.72% to settle at $109.86 a barrel, on track for a second consecutive weekly increase due to concerns about Middle East supply disruptions. Gold benefited from the weaker dollar, climbing 0.25% to $4,159.69 per ounce.