Markets have endured a roller coaster 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 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-fueled 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.

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"Concerns centered on rising investment spending, slower Azure [cloud service] growth, and a longer runway to monetizing AI."

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

And Asia also struggled.

Hong Kong and Shanghai fell more than one percent while Tokyo, Sydney, Singapore, Taipei and Manila were also down. Seoul and Wellington rose.

Jakarta saw more losses but seemed to be stabilizing after a rout over the previous two days sparked by index compiler MSCI calling on regulators to look into ownership concerns.

MSCI also said it would hold off adding Indonesian stocks to its indexes or increasing their weighting, while there are concerns it could announce a downgrade from emerging market to frontier market, which could spark an outflow of foreign capital.

Gold was also in retreat, sitting around $5,200 an ounce, a day after topping out above $5,595. Silver was at $110 from a peak of more than $121.

The previous 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.

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