Markets have endured a rollercoaster ride this week as traders weathered a weaker dollar, Donald Trump's threats against Tehran, a resumption of tariff warnings and a possible US government shutdown.

Fresh optimism in the tech sector about the future of AI has provided support, however, with healthy earnings from companies including Meta, Samsung and SK hynix providing much cheer.

However, the positivity took a hit on Thursday after Microsoft announced a surge in spending on AI infrastructure and revived concerns that companies could take some time before seeing a return on their investments.

There are also fears that firms' valuations may be a little too stretched and markets could be in a bubble, having soared in recent years to record highs on the back of a tech-fuelled rally.

"Microsoft suffered its worst session since the COVID?era crash, falling 12 percent and accounting for over two?thirds of the S&P 500's decline," wrote National Australia Bank's Rodrigo Catril.

"Concerns centred on rising investment spending, slower Azure (cloud service) growth, and a longer runway to monetising AI."

- Gold retreats -

Wall Street ended mostly in the red, with the Dow the only advancer.

Asia also struggled.

Hong Kong, Shanghai, Tokyo, Sydney, Singapore, Taipei and Bangkok were all down. Seoul, Manila and Wellington rose.

Jakarta rose after a two-day rout sparked by index compiler MSCI calling on regulators to look into ownership concerns.

The compiler said: "If insufficient progress is made towards achieving necessary transparency enhancements by May 2026, MSCI will reassess Indonesia's market accessibility status."

It warned this could result in "a weighting reduction in MSCI Emerging Markets Indexes for all Indonesian securities and "a potential reclassification of Indonesia from Emerging Market to Frontier Market status".

Gold was also in retreat, sitting around $5,150 an ounce, a day after topping out above $5,595. Silver was at $108 from a peak of more than $121.

The precious metals were also weighed by a slight uptick in the dollar, having tumbled on Trump appearing to be happy to see the world's reserve currency weaken despite the potential risk of pushing up US inflation.

Investors are keeping tabs on developments in the Middle East after the US president sent an "armada" to the region and warned Iran of possible strikes if it did not reach a fresh nuclear deal.

Both main contracts were down more than one percent, having spiked as much as five percent Thursday.

Still, concerns remain about a conflict in the crude-rich region, which would send prices soaring, also putting upward pressure on inflation.

In Washington, the US Senate edged closer to a vote on a funding deal to avert a government shutdown following a bitter standoff over Trump's sweeping immigration crackdown.

Current government funding lapses at midnight on Friday.

- Key figures at around 0700 GMT -

Tokyo - Nikkei 225: DOWN 0.1 percent at 53,322.85 (close)

Hong Kong - Hang Seng Index: DOWN 1.9 percent at 27,433.52

Shanghai - Composite: DOWN 1.0 percent at 4,117.95 (close)

West Texas Intermediate: DOWN 1.7 percent at $64.30 per barrel

Brent North Sea Crude: DOWN 1.6 percent at $68.45 per barrel

Euro/dollar: DOWN at $1.1922 from $1.1962 on Thursday

Pound/dollar: DOWN at $1.3749 from $1.3800

Dollar/yen: UP at 153.95 yen from 153.04 yen

Euro/pound: UP at 86.70 pence from 86.67 pence

New York - Dow: UP 0.1 percent at 49,071.56 (close)

London - FTSE 100: UP 0.2 percent at 10,171.76 (close)

dan/pbt

Meta

Samsung Electronics

SK Hynix

MICROSOFT

S&P Global Ratings

NATIONAL AUSTRALIA BANK

Dow

MSCI

INDEX CORP.