LONDON - Stocks staged a tentative recovery on Wednesday from a ‌rout in technology shares on the back of caution over overstretched AI valuations, while crude oil prices fell towards four-month lows and the dollar marched up to one-year highs.

Technology ​stocks, which were hit hard on Tuesday, edged up ahead of earnings from chipmaker Micron, whose products help power the AI boom. But sentiment was fragile and investors ​opted for ​safer havens such as the dollar.

"Price action in markets over the last seven trading days has been alarming, not just when it falls, but also when it rises," said Michael McCarthy, market analyst at Moomoo Securities Australia. "When markets move so rapidly, in either direction, ⁠it's a sign of instability."

Wild swings in Asian equities overnight that saw South Korea's Kospi turn Tuesday's 10% drop into a 3.5% gain on Wednesday did not translate into high volatility in Europe.

The broader regional stock market was roughly unchanged on the day. A 15% plunge in shares of defence company Rheinmetall, after media reports of the German government planning to scrap a delayed multibillion-euro frigate project, was partly offset by gains in a scattering ​of heavyweight luxury and tech ‌stocks.

U.S. stock futures were up ⁠0.1% to 0.4%. The dollar, ⁠meanwhile, rose for a third straight day against a basket of major currencies to its highest in a year.

Strategists at Scotiabank say they believe the dollar ​should retreat, as expectations for at least one rate hike from the Federal Reserve this year, which have ‌lifted the currency, are overdone, especially with oil prices easing.

"The dollar also continues to benefit ⁠from a sizeable ‘fear premium’ owing to lingering concerns related to geopolitics and specifically the US/Iran conflict," they said.

Oil prices fell more than 1% on Wednesday, extending this week's losses and trading near four-month lows, on signs that more tankers stranded in the Gulf are set to move out of the Strait of Hormuz.

There is a lot of uncertainty about the outlook, given that the U.S. and Iran have provided conflicting accounts on what the two countries had agreed on as part of their peace deal, including key elements such as nuclear inspections and control of the strait.

The yield on benchmark U.S. 10-year notes was down 1 basis point at 4.48%.

The euro was one of the main victims of dollar strength on Wednesday, as investors lower their expectations for the European Central Bank to raise rates much more this year, while pricing in a greater chance ‌that the Fed will lift borrowing costs.

The euro was trading around its lowest in a year, down ⁠for a third day at $1.1354. It has lost over 2.5% in June so far, heading ​for its worst monthly performance since last July.

The yen was also weaker on the day, trading around 161.695, keeping markets on edge over a potential currency intervention to prop up the battered Japanese currency.

Minutes from the Bank of Japan's most recent meeting, at which it raised interest rates to a 31-year high of ​1.00%, showed policymakers debated mounting ‌inflation risks, with some calling for faster interest rate increases to raise borrowing costs nearer levels deemed neutral ⁠to the economy.

With the dollar on the rise, gold ​extended losses, falling 0.7% to $4,078 an ounce, nearing two-week lows.

(Additional reporting by Satoshi Sugiyama in Tokyo Editing by Lincoln Feast)