Bargain-buying Friday helped major markets bounce back from some of this week's steep losses as investors bet on the US economy's recovery, despite lingering inflation fears.
Oil prices recovered after heavy losses a day earlier to end the week in the black as equities rose, but the dollar lost ground following recent gains. Bitcoin finished below $50,000 after oscillating throughout the day.
Global stocks have been convulsed for months by expectations that a blockbuster global recovery will send prices rocketing, forcing central banks -- particularly the Federal Reserve -- to taper the ultra-loose monetary policies that have helped drive a rally for more than a year.
But in the United States, the economy appears to be "opening at a faster clip" and the price gains that come with it may not be a problem, Quincy Krosby of Prudential Financial said.
"It seems as if the market is accepting that as long as it also is in concert with the economy doing better and corporate earnings doing better, it can withstand a little bit more inflation," Krosby told AFP.
Wall Street gained definitively after three back-to-back losses earlier in the week, with the Dow finishing up 1.1 percent and the Nasdaq adding 2.3 percent, though the indices were about the same amount lower for the week overall.
Major European markets closed around one percent ahead, with manufacturers lifting London's FTSE after BAE Systems and Rolls Royce each scored three percent gains.
While central bank officials have been in no rush to change course, investors have been preparing for what they see as the inevitable, selling firms at risk from higher interest rates, such as in the tech sector, and buying those that benefit.
- What does data say? -
The scorching inflation narrative was reinforced this week with US consumer prices coming in far above estimates on Wednesday, followed by data Thursday showing the wholesale price index at its highest since comparable records began in 2010.
Fawad Razaqzada, market analyst with ThinkMarkets, was nonetheless unworried, saying, "There is a sense of calm returning to the market with investors happy to buy the dip in the markets of stocks, especially cyclical."
Razaqzada said Fed consensus appeared to be "that inflation is likely to rise somewhat further before moderating later this year. But I am sure the Fed is secretly getting worried about the situation."
In its April monetary policy minutes published Friday, the European Central Bank agreed not to react too quickly to rising inflation.
ECB governing council "members generally agreed on the importance of looking through the increase in inflation in the short term –- which was expected to be temporary -– as well as the heightened volatility expected over the coming 12 months," according to the minutes.
ECB chief economist Philip Lane said "underlying price pressures were subdued in the context of weak demand and significant slack in labor and product markets."
But they were "expected to increase somewhat in 2021 owing to short-term supply constraints and the recovery in domestic demand," hence "inflation would exhibit some volatility for the remainder of the year".
In Asia, most markets recovered some of this week's steep losses, but Singapore slid nearly three percent amid a spike in Covid infections in the city, which put an already once-delayed travel bubble with Hong Kong in doubt.
Elsewhere, crude prices bounced after Thursday's losses of more than three percent aided by a weaker dollar, which makes commodities priced in the US currency more attractive.
- Key figures around 2115 GMT -
New York - Dow: UP 1.1 percent at 34,382.13 (close)
New York - S&P 500: UP 1.5 percent at 4,173.85 (close)
New York - Nasdaq: UP 2.3 percent at 13,429.98 (close)
London - FTSE 100: UP 1.2 percent at 7,043.01 (close)
Frankfurt - DAX 30: UP 1.4 percent at 15,416.16 (close)
Paris - CAC 40: UP 1.5 percent at 6,385.14 (close)
EURO STOXX 50: UP 1.8 percent at 4,017.44 (close)
Tokyo - Nikkei 225: UP 2.3 percent at 28,084.47 (close)
Hong Kong - Hang Seng Index: UP 1.1 percent at 28,027.57 (close)
Shanghai - Composite: UP 1.8 percent at 3,490.38 (close)
Euro/dollar: UP at $1.2140 from $1.2085 at 2040 GMT
Pound/dollar: UP at $1.4100 from $1.4054
Euro/pound: UP at 86.07 pence from 85.95 pence
Dollar/yen: DOWN at 109.34 yen from 109.44 yen
Brent North Sea crude: UP 2.7 percent at $68.85 per barrel
West Texas Intermediate: UP 2.7 percent at $65.51 per barrel