Global stocks have risen, the US dollar has hovered around its highest levels in more than six weeks and oil prices have edged up as a great deal of uncertainty surrounded US-Iran peace talks.
US Secretary of State Marco Rubio said there had been "some good signs" in talks to end the nearly three-month-old US-Israeli war on Iran, but differences remain over Tehran's uranium stockpile and control of the strait.
The worry for investors remains the near-closure of the Strait of Hormuz, a critical artery for the world's energy supplies that has sent oil prices soaring and rewired the global interest rate outlook because of inflationary concerns.
MSCI's main world stocks index rose 0.22 per cent on Friday.
Europe's STOXX 600 was up 0.43 per cent.
Nasdaq futures climbed 0.31 per cent and S&P 500 futures increased 0.26 per cent.
The S&P 500 index edged 0.17 per cent higher on Thursday at 7,445.72 after hitting 7,517.12 the previous week, a fresh record high.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.74 per cent.
Japan's Nikkei gained 2.8 per cent, just shy of a record high, led by artificial intelligence-related shares.
"Oil prices have also moved higher again as investors weigh the risk that talks drag on or fall apart," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
"The honest answer is that nobody really knows where these negotiations are heading, but for now, markets are doing what they often do when a potential geopolitical off-ramp appears - tentatively moving as if the good news could be around the corner."
Brent crude futures rose two per cent to $US104.96 a barrel but were set for a 6 per cent drop for the week.
US West Texas Intermediate futures were up 1.35 per cent at $US97.64.
Prolonged energy disruptions as the war drags on threaten to feed through to prices across the globe, spurring traders to price in rate hikes in developed and emerging markets.
Markets are now pricing in a more than a 50 per cent chance of a rate hike from the US Federal Reserve by the end of 2026 versus expectations of two rate cuts before the war started.
That has lifted Treasury yields and boosted the dollar, which has also benefited from safe-haven demand.
The euro was at $US1.1614, close to the six-week low it hit on Thursday, and is set for a one per cent drop in May.
Against a basket of currencies, the dollar was at 99.247.
The Japanese yen last fetched 159.11 per dollar, perilously close to the crucial 160 level that traders fear could bring Japanese authorities into the market again.
Two-year US Treasury yields have risen one basis point to 4.09 per cent, while yields for two-year bonds in other major markets have fallen sharply.
The dollar remained firm against the yen following an intervention worth an estimated $US65 billion ($A91 billion) from Tokyo just weeks ago to shore up the currency. It was last up 0.1 per cent at 159.125 yen.
Data on Friday showed Japan's core inflation slowed to a four-year low in April, complicating the outlook for the Bank of Japan's rate-hike path.
Analysts said the stronger-than-expected first quarter GDP and firm April exports data earlier this week showed the resilience of the Japanese economy despite the energy shocks, which supported a Bank of Japan hike.
