San Francisco Frontiers - Stocks sluggish as AI disruption worries move to fore

A lower-than-expected US consumer inflation reading meanwhile was not enough to bolster expectations of more Federal Reserve rate cuts to stoke the world's biggest economy as Wall Street laboured to clamber into the green two hours into the final session of the week.

"The fact that goods prices, excluding food and energy, were unchanged on the month reinforces the narrative that tariffs are not proving inflationary," said James Knightley, ING's chief international economist, responding the the US price data.

On Wall Street, the Dow and the broader S&P 500 added barely 0.1 percent while the Nasdaq was off by the same degree after slumping more than two percent Thursday, a decline that prompted losses across Asia earlier Friday.

In Europe, Paris dropped 0.4 percent at the close, L'Oreal shares falling four percent after the cosmetics giant posted sales that fell short of analyst expectations, fuelling fears of weakness for its luxury brands and performance in the key Chinese market.

London's FTSE 100 ended up 0.4 percent and the DAX advanced 0.25 percent in Frankfurt.

Amid growing concerns over the massive investments by AI heavyweights, investors also worry that software, logistics and even real estate companies will see their operations upended by artificial intelligence advances.

"The concerns that have revolved around AI disruption in the software segment have spread," noted Joshua Mahony, chief market analyst at Scope Markets.

A sense of calm had descended on trading floors early in the week after recent asset-wide volatility, helped by forecast-busting US jobs figures.

However, growing concern about the hundreds of billions spent on artificial intelligence infrastructure -- and the bundles more announced in the past few days -- have fanned speculation about when, if ever, companies will see a return.

The release of new tools this month that can perform crucial tasks in a range of fields, including legal, sales and marketing, has compounded those jitters -- hammering companies worried about competition.

"The AI scare trade has shocked investors in 2026 and has brought a significant amount of market dislocation," said Kathleen Brooks, research director at XTB.

A slew of corporate earnings has also given investors pause, with several major names missing expectations or warning about the 2026 outlook.

- Key figures at around 1645 GMT -

New York - Dow: UP 0.1 percent at 49,488.82 points

New York - S&P 500: UP 0.1 percent at 6,842.65

New York - Nasdaq: DOWN 0.1 percent at 22,583.76

London - FTSE 100: UP 0.4 percent at 10,449.91 (close)

Paris - CAC 40: DOWN 0.4 percent at 8,311.74 (close)

Frankfurt - DAX: UP 0.2 percent at 24,914.88 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 56,941.97 (close)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 26,567.12 (close)

Shanghai - Composite: DOWN 1.3 percent at 4,082.07 (close)

Euro/dollar: FLAT at $1.1871 from $1.1876 on Thursday

Pound/dollar: UP at $1.3638 from $1.3620

Dollar/yen: UP at 152.90 yen from 152.75 yen

Euro/pound: DOWN at 87.04 pence from 87.16 pence

Brent North Sea Crude: DOWN 0.1 percent at $67.56 per barrel

West Texas Intermediate: DOWN 0.2 percent at $62.73 per barrel

D.Brown--SFF