AI concerns continue to hit Big Tech stocks Friday as oil prices rise again

Friday brought continued concerns about artificial intelligence (AI) to Big Tech stocks, with oil prices rising again. The S&P 500 opened lower by 0.5 percent, while the Dow Jones Industrial Average fell by 547 points, or 1 percent. The Nasdaq composite experienced a minor decline of 0.4 percent. The troubles with AI came amidst rising costs of building data centers and purchasing more AI chips.

Meta Platforms, which is developing its Muse AI agent, saw a slight dip in its share price before the market opened, despite reporting stronger-than-expected revenue for the latest quarter and a profit that fell short of expectations. The company announced plans to issue a new class of stock to raise funds for AI investments and other expenses.

Tesla, on the other hand, showed a slight improvement in premarket trading after reporting a stronger-than-anticipated profit for the summer, although revenue was weaker than forecast. The chip giant, Nvidia, dropped 4.4 percent at the close on Thursday but managed to rebound slightly before the start of Friday's trading. It is the largest company on Wall Street by total value, and its stock movements have the most significant impact on the S&P 500.

The Toronto Stock Exchange also dropped by nearly 1 percent. European markets mirrored the global downturn, with France's main index declining by 1 percent. In contrast, the yield on the 10-year Treasury bond rose slightly to 4.97 percent. Oil prices reached levels not seen since May, as efforts to restart negotiations between the U.S. and Iran faced difficulties.

Brent crude oil prices surged 1.8 percent to just above US$115 a barrel, reaching their highest level since March. U.S. benchmark crude oil increased by the same percentage to $101.22 per barrel. Gasoline prices in the U.S. are on the rise again, with the national average for a gallon of regular gas reaching $4.29, a two-cent increase from last year.

Higher oil prices have had a negative impact on stocks. The price of Brent crude oil jumped by 4 percent on Thursday and has surged from less than $97 at the beginning of the month due to uncertainty regarding when the war with Iran will allow the global energy industry to return to normal. In Europe, Germany's DAX dropped by 0.8 percent to 25,171.50, while the CAC 40 in Paris fell by 0.7 percent to 7,756.34.

Britain's FTSE 100 declined by 0.5 percent to 10,670.55. Asian markets, for the most part, were higher. The U.S. dollar strengthened to 156.92 Japanese yen from 156.77 yen, while the euro weakened to $1.1195 from $1.1218. The Canadian dollar also made a slight gain, rising about a tenth of a cent to 71.52 U.S. cents.