LONDON – Global stocks headed for their strongest weekly gain since May on Friday, ahead of major ​US jobs data, as investors' optimism over robust earnings growth and enthusiasm over AI offset concern about another flare-up in Middle East tensions ‌that boosted oil.

MSCI's All-World index has risen 2.3 percent this week, the most in three months, and on Friday was steady, while shares in drugmakers and technology companies lifted Europe's STOXX 600 by 0.2 percent on the day and 1.6 percent for the week.

After bouts of volatility sparked by concerns over the durability of the AI-driven rally, investors are now squarely focused on the US payrolls report due later ​in the day, which could prove crucial for the interest-rate outlook. Forecasts are centered on a rise of 80,000 jobs for July after a 57,000 ​gain in June, with the unemployment rate forecast to hold steady at 4.2 percent.

Money markets show traders are split over whether or ⁠not the Federal Reserve will raise rates next month, meaning Friday's payrolls number could be instrumental in tipping the balance in one direction or another.

"With yields and ​inflation still the key risks for stocks, we expect Friday's NFP to trade as a 'good news is bad news' print," said Michael Feroli, chief US economist at JPMorgan, adding ​that a strong jobs number would reinforce higher-for-longer pricing and put upward pressure on rates.

Conversely, equities may respond positively to a soft payrolls report as yields ease and policy expectations shift toward a dovish path, added Feroli.

Given Fed Chair Kevin Warsh's reluctance to offer any kind of guidance on what to expect in terms of monetary policy, the employment data could cause an even greater ​splash in the market than usual, analysts said.

"An exceptionally poor, or strong, print can in this way produce a much larger impact on pricings than in a ​time before, when the Fed was much clearer about its options. Vacuums must be filled by whatever is available and the market was always going to pick itself as the solution, and ‌I suspect ⁠the practical impact of that will be a broad increase in volatility," Caxton strategist David Stritch said.

On the US market, Nasdaq futures rose 0.3 percent and S&P 500 futures were flat. Shares in Cloudflare rose 16 percent on the Tradegate retail platform, having surged 18 percent in after-hours trading on Thursday following the cloud services provider's upbeat forecast.

Oil climbs again

Brent crude futures rose 1 percent to $83 ​a barrel, but were still set ⁠for a weekly loss of 7 percent and remained well off their recent peak of $102 a barrel two weeks ago.

Treasury yields were roughly unchanged on the day, as uncertainty ahead of the jobs data kept trading activity subdued. The 2-year note yield was last at 4.243 percent, while the 10-year yield traded at 4.67 percent.

The dollar held steady, leaving the Japanese yen around 158.4. The US jobs report could decide the next moves in the yen after last week's historic ⁠currency market intervention by Japan ​and the US sparked a sharp rally.

Gold, meanwhile, has traded in a mirror image to the ​dollar, rising to its highest in around six weeks this week, compared with the dollar trading around six-week lows. The gold price has risen by more than 6 percent this week, its strongest such showing since ​mid-January, when it hit a record $5,594. It was last up 1.2 percent at $4,289 an ounce.