Stocks pushed higher on Friday while oil prices also rose as traders tracked headlines on Iran war peace talks, against a backdrop of corporate earnings optimism and AI enthusiasm that have pushed indexes to record highs.

Wall Street moved broadly higher, with the Dow finishing at a second straight all-time high, despite concerns that soaring energy prices will stoke inflation and lead to tightening monetary policy.

Federal Reserve Governor Chris Waller added his voice to a growing bloc of policymakers calling for the US central bank to indicate that its next move could be an interest rate hike.

Fears about inflation sent the yield on the 30-year Treasury earlier this week to its highest level since 2007, with long-term debt yields in Britain and Japan hitting rates not seen since last century.

But stocks have been reassured as bond yields have retreated in recent days.

Equity investors are giving the benefit of the doubt to negotiators seeking to end the nearly three-month Middle East war.

Markets believe "even though things sound dicey surrounding the Iran situation, that the two sides are talking and that they'll ultimately get to a peace deal," said Briefing.com analyst Patrick O'Hare.

Mediator Pakistan's powerful army chief arrived in Tehran on Friday, as the Islamic republic examined a new US proposal to end the war.

But an Iranian spokesman cautioned that the visit did not necessarily mean "we have reached a turning point or a decisive situation."

European markets also posted gains after Asia closed out the week with a rally, with sentiment boosted by AI chip giant Nvidia's latest earnings report that blew past analyst forecasts.

In Europe, German business morale unexpectedly increased in May, a survey showed on Friday, raising hopes that Europe's biggest economy is weathering the Iran war energy shock better than feared. (AFP)



Edited by Robert Kemp