Wall Street’s Friday Rally Eases AI Panic

The FTSE 100 fell for the week as a global AI selloff rattled investors, even as Wall Street staged a Friday relief rally led by the Nasdaq. Oil extended its sharpest weekly drop since the pandemic on hopes President Trump will hold off further strikes on Iran, while gold pressed higher for a fifth straight week. The dollar held near recent highs as traders awaited Tuesday's US inflation data. 

Equities 

The FTSE 100 fell 1% on Friday to close at 10,673.94 points, ending the week down 0.5%, as fears over AI regulation following the Democrats' capture of Congress sparked a broad risk-off move across global markets. The FTSE 250 slipped 0.8% on Friday but still closed the week slightly higher. 

Most sectors in London fell, with telecoms among the weakest as BT Group and Airtel Africa both declined. Precious metal miners were a rare bright spot, tracking gold's advance. On the FTSE 250, Man Group dropped sharply after Kuwait's public pension fund won a lawsuit against the asset manager. 

Lloyds separately said UK house prices fell at their fastest annual pace in a year in October, as higher mortgage costs weighed on demand, adding to a cautious tone ahead of this week's UK data. 

Wall Street staged a relief rally on Friday after Thursday's selloff wiped roughly two and a half trillion dollars off one of its major indices in a single session. The Dow Jones Industrial Average fell 0.46%, while the S&P 500 added 0.31% and the Nasdaq Composite jumped 1.1%, as chipmakers led the rebound. 

Nvidia rose after its worst session since January 2025, while AMD, Intel and Micron also gained as chipmakers rebounded broadly. Tesla and SpaceX advanced too, recovering some of the week's earlier losses. 

The selloff was triggered by concerns that a Democrat-controlled Congress would tighten regulation of the AI industry and slow data-centre spending, with Texas - a major hub for the sector - flagged as a state likely to introduce new rules limiting further buildouts. 

European and Asian shares rebounded in early Monday trading after a brutal session last week that saw Japan's Nikkei and South Korea's Kospi both tumble sharply. US equity futures also edged higher, though more AI-sector earnings - including cloud-computing firm CoreWeave on Tuesday - are expected to test the fragile recovery. 

Forex & Commodities 

The dollar index held near 102.2 early on Monday, not far from a one-and-a-half-year high against the euro, after surging on Friday as a stronger-than-expected October payrolls report cemented bets for a December Federal Reserve rate rise. Futures now imply around an 80% chance of a quarter-point hike next month, up from roughly 70% a week earlier. 

Sterling held around $1.336, little changed on the session, while the euro edged higher after sliding to its weakest level since May on Friday. The New Zealand dollar rebounded from a seven-month low after too-close-to-call weekend elections left the country waiting for final results later this month. 

Gold extended its rally, climbing 1.4% to around $4,123 an ounce in early trading after gaining almost 5% over the past week, as softer oil prices eased inflation worries and encouraged buying. Silver, platinum and palladium all advanced alongside the move. 

Brent crude held little changed near $98 a barrel after posting its steepest weekly drop since the start of the pandemic, as President Trump said he was highly unlikely to order fresh strikes on Iran while talks to end the conflict continue. West Texas Intermediate rose slightly to above $91 a barrel. 

Attacks on shipping near the Strait of Hormuz and a claimed Houthi strike on Saudi Aramco's Riyadh offices kept supply risks in view, even as JPMorgan warned the market was heading back into a widening global glut. 

Several Federal Reserve officials reinforced the case for another rate rise on Friday, pointing to a resilient economy despite recent market turmoil and to inflation still running above target. Markets now turn to Tuesday's US inflation data for furt