BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening lower on Friday after U.S. tech shares sold off overnight on concerns over the faltering global AI trade.
U.S. equity futures ticked lower due to energy-driven inflation concerns from Middle East tensions ahead of flash manufacturing and service PMI readings and the final reading of the University of Michigan's consumer sentiment report, due later in the day.
Investors also await cues from a slew of central bank meetings, including the U.S. Federal Reserve, the European Central Bank and the Bank of Japan, due next week.
Despite near-term inflation headwinds, the Fed is widely expected to leave interest rates unchanged at its October 27-28 meeting, although there is a 72.4 percent chance of a quarter point rate hike in December.
Asian stocks were lower for a second straight session due to a sharp slide in artificial intelligence (AI) and tech shares.
As doubts deepen over the ability of AI companies to fund their massive infrastructure spending, investors now await earnings from Microsoft, Amazon and Alphabet for further direction.
Traders flocked to government bonds and U.S. Treasurys as a safe haven, pushing the 10-year Treasury yield below 5 percent for the first time in a month.
The Japanese yen held gains as traders seek safety amid global equity selloff. Gold was subdued at $4,014 an ounce after falling nearly 3 percent in the previous session to reach its lowest level since July 20 amid escalating Middle East hostilities.
Brent crude prices traded almost 1 percent higher near $114 a barrel in Asian trade, heading for a third weekly gain and reaching the highest level in over five months as intensifying attacks on Saudi Arabia raised the risk of wider Middle East supply disruptions.
It is feared that the Iran war may escalate and potentially continue for a longer time than anticipated after the U.S. midterm elections on November 3, 2026.
U.S. stocks fell sharply overnight as tech stocks came under pressure amid renewed concerns about debt-fueled AI infrastructure spending.
Nvidia CEO Jensen Huang told CNBC that demand for specialized AI cloud providers is 'off the charts, but 'scarcity of capital' is holding back growth.
Inflation and rate hike concerns also rattled investors after crude prices surged to a five-month high on news of Iran-backed Houthis launching new strikes against Saudi targets.
Also, media reports suggested that the U.S. and Israel have drawn up specific plans for renewed strikes on Iran after next month's midterm elections.
President Donald Trump denied the U.S. is negotiating with Iran and said 'something one way or the other' will 'happen fairly soon.'
In economic news, data showed applications for unemployment benefits fell to a three-month low last week, underscoring the stability of the labor market and reinforcing expectations for another interest-rate hike this year.
The tech-heavy Nasdaq Composite plunged 2.6 percent to post its steepest single-day drop since early June and reach its lowest closing level in over a month.
The S&P 500 tumbled 1.2 percent, while the narrower Dow finished marginally higher.
European stocks retreated on Thursday, pressured by a surge in global oil prices, a relentless sell-off in French sovereign debt and concerns over spending on AI infrastructure.
The pan-European STOXX 600 declined 1 percent. The German DAX fell 1.1 percent, France's CAC 40 shed 1.4 percent and the U.K.'s FTSE 100 dipped 0.3 percent.
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