Upbeat company earnings and healthy US data buoyed stock markets on Friday, pushing ongoing concerns about President Donald Trump's tariffs into the background.
New York — whose S&P 500 and Nasdaq Composite struck record highs on Thursday — held on to gains, even if the Dow struggled a little at the start.
Most European and Asian markets were pulled higher as well.
Only Tokyo faltered, dragged down ahead of weekend upper-house elections that could spell trouble for Prime Minister Shigeru Ishiba.
“The positive tone to risk sentiment is continuing on Friday, after a week of record highs for global equities,” said Kathleen Brooks, research director at the XTB trading group.
Caution over high valuations was being put aside, for now, as were worries about Trump's threats of further tariffs if governments did not agree trade deals by August 1.
“With the president toning down his rhetoric, markets are quick to forget tariff risks and concentrate on the positives including a resilient US economy,” Brooks said.
The overall optimism was fuelled by data suggesting the US economy was doing well, including healthy retail activity and above-forecast results from America's biggest banks.
A June consumer price index report released this week “does not reveal tariff-induced price increases, but a closer look shows clear signs” they could be building, said Holger Schmieding, chief economist at Berenberg bank.
“We expect (US) annual core inflation to approach 3.5 percent by year-end and the Fed to hold the policy rate at the 4.25-4.50 percent target range,” he said.
The dollar retreated on Friday as traders bet on the Federal Reserve cutting US interest rates.
One Federal Reserve governor, Christopher Waller, on Thursday argued for a July rate cut, saying he saw limited upside inflation risks.
Trump this week denied he was planning to sack Fed boss Jerome Powell, whom he had been urging to reduce US borrowing costs to further boost the world's top economy.
A meeting in South Africa of G20 finance ministers — including US representation — on Friday pointedly stressed that “central bank independence is crucial” around the world.
In corporate news, American Express followed financial sector peers in reporting better-than-expected second-quarter results.
Results from streaming giant Netflix also outperformed, though its share price slipped on Friday as investors weighed its valuation.
In London, British luxury brand Burberry said sales had not fallen as much as analysts expected, “which is a sign that the company’s new strategic direction could be working”, said XTB's Brooks.
