Global shares inch higher, on track for monthly gain despite AI, Iran jitters

Global shares edged up on Friday to within a fraction of a fresh record high, and were set for a monthly gain, even as geopolitical tensions and concerns about AI lingered.

Manish Kabra, head of U.S. equity strategy at SocGen, said that in the absence of any major news, the market was refocusing on fundamentals, which he described as "rock solid".

"This is on a global basis. When I say fundamental, this is the profit cycle, the growth cycle, the broadening of the growth," said Kabra.

Global shares rose 0.1%, as did Europe's STOXX 600, buoyed by some generally positive earnings.

Nevertheless, jitters around AI spending and fears about the technology's broader business disruptions, as well as U.S.-Iran tensions, have weighed on sentiment this week.

U.S. stock market futures were flashing red around midday in London, with S&P futures and the tech-heavy Nasdaq futures both down 0.5%.

Tech shares fell on Thursday even as Nvidia posted better-than-expected results for the January quarter and forecast current-quarter revenue above market estimates.

"It seems 'the Street' simply wanted more, or perhaps just isn't prepared to chase the stock at its current lofty valuation," IG market analyst Tony Sycamore said about Nvidia's results in a note.

Shares in Nvidia ended down over 5% on Thursday.

IRAN TENSIONS SIMMER

Markets were also watching developments in U.S.-Iran nuclear talks, as Washington amassed more military resources in the Middle East.

An Omani mediator gave an optimistic summary of the latest negotiations, but signs of a breakthrough that could avert potential U.S. strikes remained elusive.

"With no major breakthroughs announced in the U.S.–Iran talks, crude markets remained in wait-and-see mode, continuing to price in a significant risk of military escalation between the two countries," said Mantas Vanagas, senior economist at Westpac Group.

U.S. crude rose 2.4% to $66.77 a barrel, and Brent rose to $72.24, up 2.1%. Spot gold shed 0.1% to $5,180.29 an ounce. 

The U.S. and Iran plan to resume negotiations after consultations in their countries' capitals, Omani Foreign Minister Sayyid Badr Albusaidi said in a post on X after the day's meetings in Switzerland. 

Any substantial move forward could curb the chance of U.S. President Donald Trump carrying out a threatened attack on Iran that many fear could escalate into a wider war.

POLITICS ALSO IN FOCUS FOR CURRENCIES

The dollar index, which measures the greenback against a basket of currencies, was flat at 97.75, with the euro steady at $1.1802. The yen was down 0.1% at 155.9 per dollar.

Sterling was stable at $1.348 after British Prime Minister Keir Starmer's Labour Party suffered an election defeat in an area of Greater Manchester that it had dominated for almost a century.

The yield on benchmark U.S. 10-year notes fell 3 basis points to 3.99%.

Data in Japan showed cooling inflation in Tokyo and weaker-than-expected factory output, complicating the case for policy rate increases by the central bank.

(Reporting by Rocky Swift in Tokyo and Lucy Raitano in London. Editing by Sam Holmes, Kim Coghill and Mark Potter)