(Updates throughout; refreshes prices at 0900 GMT)

By Amanda Cooper

LONDON, April 23 (Reuters) - Global shares rose on

Tuesday, driven by a recovery on Wall Street, where investor

focus is pinned on earnings reports from the U.S. megacaps,

while the yen hit a new 34-year low against the dollar,

prompting a warning from Japanese officials.

The MSCI All-World index, which on Friday

hit a two-month low, was up 0.2%, lifted by gains in Europe,

where the FTSE 100 hit a record high, while the STOXX

600 traded at one-week highs thanks to the technology

sector.

Adding to the optimism was a series of surveys of business

activity that showed Germany returned to growth in early April

after months of contraction, while activity in the broader euro

zone expanded at its fastest clip in nearly a year.

Investors are less concerned right now about the threat of a

major re-escalation of tension in the Middle East and more

focused on earnings.

Against that backdrop, gold is heading for a week-on-week

drop of 3.2%, its largest this year, while oil has backed off

last week's highs.

"We are turning a bit more positive on risk sentiment. There

still remains a fair bit of uncertainty around geopolitics and

rising U.S. real yields, but we are more positive than we were a

week ago," Mohit Kumar, a strategist at Jefferies, said.

The dollar retreated from its recent highs, but is

comfortably supported by the view among investors that no rate

cuts will be forthcoming any time soon from the Federal Reserve

and by the climb this month in Treasury yields to their highest

since November.

On Wall Street, big tech shares outperformed ahead of

quarterly results this week, sending the Nasdaq 1.1%

higher. AI darling Nvidia ( NVDA ) gained 4.4% while Amazon.com ( AMZN )

rose 1.5% and Alphabet jumped 1.4%, although

Tesla dropped 3.4 as it cut prices in its major

markets.

Tuesday brings a wealth of big-cap earnings, including

Tesla, PepsiCo, UPS, Lockheed Martin ( LMT )

and Halliburton ( HAL )

"Odds are the earnings reports that we see over the next few

weeks will be positive, but obviously there's still issues

around what the Fed will do the next," said Shane Oliver, chief

economist at AMP. "It's too early to say that problems in the

Middle East have gone away."

"There are lots of things that could cause volatility

between now and the end of the year. And so we're probably

coming to a more constrained, more volatile period for markets."

Aside from Tesla, Meta Platforms, Alphabet and Microsoft

will release earnings this week.

MEGA WOBBLE?

UBS on Monday downgraded its rating on the mega-cap

companies, warning that profit growth momentum of the so-called

Big Six technology stocks could "collapse" over the next few

quarters.

U.S. business activity, quarterly economic growth and a

measure of monthly inflation top the macro data bill this week.

Traders now expect the first Fed rate cut to come most

likely in September and just 40 basis points' worth of cuts,

compared with expectations for 150 bps of cuts at the beginning

of the year.

Treasuries have been a big casualty of the shift in

thinking. The yield on the two-year note, the most

sensitive to changes in rate expectations, was up 1.8 bps at

4.898%.

In Europe, the picture is different. The European Central

Bank is expected to cut in June and this divergence is weighing

on the euro. It was last up 0.2% at $1.0673, not far

off last week's five-month low of $1.0601.

The yen slid to another 34-year low on Tuesday,

but recovered modestly to trade flat at 154.85 to the dollar.

Japan finance minister Shunichi Suzuki said last week's

trilateral meeting with his U.S. and South Korean counterparts

laid the groundwork for Tokyo to take appropriate action in the

foreign exchange market.

This is the clearest warning yet from Japanese monetary

authorities that tolerance for the slide in the currency is

wearing thin and official intervention to prop it up is likely.

Oil recovered some of the sharp losses overnight as

investors continued to assess the situation in Middle East.

Brent futures rose 0.9% to $87.80 a barrel, while U.S.

crude rose 0.9% to $82.60 a barrel.

Gold fell for a second day, dropping 1% to $2,300 an

ounce, after shedding 2.7% the day before, as investors took

profit on the 12% rally in the price so far this year.

(Additional reporting by Stella Qiu in Sydney. Editing by Sam

Holmes, Kim Coghill and Ros Russell)