World shares, US futures advance after AI fears drag Wall Street lower

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BANGKOK (AP) — European shares were higher Friday after a mixed day of trading in Asia, as worries over risks linked to massive investments in artificial intelligence and a potential U.S.-Iran conflict weighed on major benchmarks.

Germany's DAX rose 0.2% to 25,103.32 and the CAC 40 in Paris was up 0.7% at 8,460.35. Britain's FTSE 100 picked up 0.4% to 10,672.75.

The future for the S&P 500 was up 0.3% while that for the Dow Jones Industrial Average gained 0.2%.

Tokyo’s Nikkei 225 fell 1.1% to 56,825.70 as shares in major banks and other financial institutions skidded on worries over the potential impact of weakening private credit companies that have lent to companies exposed to the risk that AI will steal away their businesses.

That includes market heavyweights like Mitsubishi UFJ Financial Group, which has a partnership with Blue Owl Capital, one such private-credit company. MUFJ's shares dropped 2.2% in Tokyo after Blue Owl lost 5.9% on Thursday.

Toyota Motor Corp. fell 3.7% and Sony shed 3.2%.

In Hong Kong, the Hang Seng lost 1.1% to 26,413.35 as the market reopened following Lunar New Year holidays. Markets in mainland China and Taiwan remain closed until next week.

South Korea's Kospi jumped 2.3% to a new record of 5,808.53, however, led by major defense contractors like Hanwha Aerospace, whose shares soared 6.4%. The company is one of many benefiting from a ramp up in military spending in many countries.

Elsewhere in the region, Australia's S&P/ASX 200 edged 0.1% lower to 9,081.40.

India's Sensex added 0.7%, and the SET in Bangkok lost 1.1%.

On Thursday, the S&P 500 slipped 0.3%. The Dow Jones Industrial Average dropped 0.5% and the Nasdaq composite lost 0.3% to 22,682.73.

Booking Holdings dropped 6.1% for one of the market’s sharper losses, even though the company behind the Booking.com, Priceline and OpenTable brands reported a profit for the latest quarter that edged past analysts’ expectations.

It is one of many companies under pressure because of worries that competitors powered by artificial-intelligence technology could upend their industries and take away customers. Booking’s stock has lost roughly a quarter of its value so far this year already.

Walmart, meanwhile, pushed and pulled on the market after jumping to an early gain of 2.7% and then flipping to a loss of 1.4%. The retail giant delivered stronger results for the latest quarter than analysts expected, but it gave a profit forecast for the upcoming year that fell short of estimates.

Some of the bigger gains in the S&P 500 came from stocks of oil companies, which climbed with the price of crude. A barrel of benchmark U.S. crude rose 1.9%, while Brent added 1.9%. Crude prices have climbed to their highest level since early August as both the United States and Iran have signaled they are prepared for war if talks on Tehran’s nuclear program fizzle out.

Early Friday, U.S. benchmark crude shed early gains, falling 20 cents to $66.20 per barrel. Brent, the international standard, shed 17 cents to $71.49 per barrel.

Higher oil prices could lead the Federal Reserve to hold off on cuts to interest rates. Fed officials said at their last meeting that they want to see inflation fall further before they would support cutting rates further this year.

On the other hand, a report saying the number of U.S. workers applying for unemployment benefits eased could signal the pace of layoffs is slowing.

Other U.S. economic reports said that growth for manufacturing in the mid-Atlantic region is accelerating, but potential The U.S. trade deficit also widened in December by more than economists expected.

In other dealings early Friday, the dollar rose to 155.59 Japanese yen from 154.99 yen. The euro slipped to $1.1763 from $1.1775.

The price of gold rose 1% and the price of silver was up 2.7%.

Bitcoin's price rose 1.9% to $68,135.