World stocks rallied on Friday, with Wall Street opening higher and European indexes recovering from a volatile week pegged to a growing U.S.-led trade battle with other top global economies, with those concerns pushed to the backburner for now.

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Bank shares jumped after U.S. lenders cleared the second part of the Federal Reserve`s stress test, pushing the sector 0.88 percent higher after it broke a 13-day losing streak on Thursday, and helping U.S. stocks to recover some losses.

Nike also pushed U.S benchmark indexes higher after the world`s largest sneaker maker surged as much as 11.5 percent to a record peak on a strong earnings report.

The Dow Jones Industrial Average rose 276.37 points, or 1.14 percent, to 24,492.42, the S&P 500 gained 25.57 points, or 0.94 percent, to 2,741.88 and the Nasdaq Composite added 66.24 points, or 0.88 percent, to 7,569.92.

MSCI`s gauge of stocks across the globe gained 1.20 percent.

Earlier, the U.S. stock market briefly dipped on a report by the Axios news website that indicated President Donald Trump was keen for the U.S. to withdraw from the World Trade Organization; the market recovered after Treasury Secretary Steven Mnuchin told Fox Business Network the report was wrong. The Axios report cited people involved in talks with Trump.

The market`s wobbling was a reminder of heightened investor sensitivity to trade-related remarks or developments.

"The markets are very much subject to headlines on trade and tariffs," said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

"They are important from the standpoint that trade globalization has been the cornerstone for growth and when you do something to sort of undermine that cornerstone, that`s a reasonable reason for concern."

The U.S. administration is due to impose tariffs on Chinese goods worth $34 billion beginning July 6, likely prompting a tit-for-tat response from Beijing.

The pan-European FTSEurofirst 300 index rose 1.13 percent.

The euro was set for its strongest day in a month after leaders at an EU summit reached an agreement on migration, rising 0.8 percent to $1.1658. The agreement eased a threat to German Chancellor Angela Merkel`s ruling coalition over the issue.

While Asian stocks rose, the Chinese yuan suffered its worst month on record, losing 3 percent against the dollar in June as investors pulled money from a market likely to suffer from higher barriers to trade.

The U.S. dollar was set for its strongest quarterly gains since the fourth quarter of 2016, helped by the U.S. Federal Reserve`s move to raise interest rates in June, and expectations of further hikes this year.

The dollar index, tracking it against six major currencies, edged down 0.6 percent to 94.787 as the euro rose.

The yield curve between two-year and 10-year U.S. notes flattened to 31 basis points, the flattest since 2007, after U.S. consumer spending data disappointed some analysts’ expectations. Some investors see its flattening as a sign recession may be around the corner.

Oil prices extended gains to fresh highs on a tighter market as U.S. sanctions against Iran threatened to remove a substantial volume of crude oil from world markets amid rising demand.

Brent crude rose 2 percent to $79.51 per barrel, while U.S. crude added 0.6 percent to $73.90, its highest since November 2014.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)