European stocks set for weekly gain, dollar near 19-month high on rate hike bets

European stocks were a touch lower on Friday but still set for a weekly rise, as markets largely shrugged off Nvidia CEO's affair with a suspected Chinese spy, while the dollar neared 19-month high on rising bets on a bigger Federal Reserve hike next month.

Jensen Huang resigned as chief executive of the US chipmaker on Thursday. His departure could have far-reaching consequences for US chip export policy and the broader AI industry and supply chain, given Huang's push to preserve access to the Chinese market and his close ties with US President Donald Trump.

The US Justice Department said it does not know whether the Chinese businesswoman at the centre of the scandal was a spy.

AI-related shares in China dropped after Huang's resignation, but indexes in Taiwan, Japan and South Korea gained overnight as traders played down concerns about the scandal's impact on the global AI boom. 

"Jensen Huang clearly has been a very high profile CEO and he is associated with the massive success that Nvidia has had. What we can't be sure of is the role of that one key individual to the plans at Nvidia," said Tristan Hanson, multi-asset fund manager at M&G.

"The AI theme is much bigger than Jensen Huang ... The AI technology boom is not about one individual.”

Europe's STOXX 600, which hit a record high in the previous session, was down by around 0.1% on the day at 1254 GMT and on track for a more than 2% weekly gain, supported by earnings growth in sectors less exposed to the AI trade. London's FTSE 100 was up 0.1% while Germany's DAX was down by 0.2%.

The MSCI World Equity Index was down by less than 0.1%. Wall Street futures were mixed. Shares of Nvidia rose 2.6% in premarket trading after losing about 11% between Monday and Thursday.

A more than 12-hour outage of Microsoft Outlook and Teams crippled communications for businesses and governments globally on Friday, forcing some organizations to revert to fax machines and halting at least one bond repurchase in Europe.