Gucci and Volvo Cars get hammered as oil and AI worries rattle markets

Oil prices surged to a three-week high on Friday as geopolitical tensions and artificial intelligence spending concerns rattled global markets. The benchmark Brent North Sea crude climbed above $116 a barrel, while the US West Texas Intermediate rose more than 3.8 percent to $103.27 a barrel. AJ Bell's chief financial analyst Danni Hewson noted that escalating tensions in Ukraine and increased energy demand as winter approached were contributing to the upward pressure on oil and gas prices.

Wall Street's main indices experienced a significant sell-off, with the Dow finishing down 1.2 percent and the Nasdaq dropping 0.2 percent, reversing its recent upward trend. European stock markets also declined following poor earnings reports from Gucci parent Kering and Swedish automotive group Volvo Cars. The luxury brand's results failed to reassure investors about a turnaround at its key Gucci brand, while Volvo Cars announced a new five-billion-kronor ($621 million) savings plan that would lead to job cuts in Sweden.

In response to the market volatility, investors have become more cautious about capital spending on data centers due to rising energy prices. Looking ahead, the focus will shift to interest-rate meetings by the US Federal Reserve and European Central Bank, along with updates on US economic growth data.