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Earnings from Amazon ( AMZN ), Apple ( AAPL ) lift Nasdaq futures by 1.1%

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Nikkei heads for 16% monthly gain, best since 1990

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Chinese shares lose ground after trade truce, dismal PMI

data

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Dollar near 3-month highs, oil down for three months

(Updates with European market moves)

By Marc Jones and Stella Qiu

LONDON/SYDNEY, Oct 31 (Reuters) -

World shares were set for a seventh straight month of gains

and the dollar was near a 3-month high on Friday after Amazon ( AMZN )

and Apple's ( AAPL ) earnings reinforced global tech optimism and the

hope that massive AI spending will ultimately bolster growth.

European stocks started modestly lower ahead of euro

zone inflation data later and after the European Central Bank on

Thursday had further dampened talk of another euro zone interest

rate cut any time soon.

Nasdaq futures jumped 1.1% and S&P 500 futures

gained 0.6%, though, after forecast-busting Amazon ( AMZN ) earnings

sent its shares up more than 11% in pre-market trading

and a prediction of bumper iPhone sales sent Apple's ( AAPL ) up

over 2%.

That offset overnight tumbles in Meta and Microsoft ( MSFT )

amid worries about their surging AI spending. Six of

the "Magnificent Seven" U.S. tech megacaps have now reported,

with Nvidia - which has just become the world's first $5

trillion company - due to report in three weeks' time.

In Asia, Japan's Nikkei had rallied over 2%,

boosting its weekly and monthly gains to 6% and 16.4%,

respectively. That was the largest monthly rise since 1990,

turbocharged by hopes for aggressive fiscal stimulus under new

Prime Minister Sanae Takaichi.

This week has also seen the Bank of Japan hold interest

rates steady despite many economists predicting a hike.

Chinese blue chips and Hong Kong's Hang Seng

both skidded roughly 1.5% though after data showed

China's factory activity contracted at the fastest pace in six

months in October.

Investors also locked in gains after a

trade truce

reached by U.S. President Donald Trump and Chinese

President Xi Jinping, which will lead to reduced U.S. tariffs on

imports of Chinese goods and continued rare earth exports from

China.

SUBTLE SHIFTS

This week, major central bank meetings have delivered

decisions that have subtly shifted expectations. The biggest

surprise came from Federal Reserve Chair Jerome Powell who

pushed back against the market's sanguine view about a rate cut

in December.

Both Treasuries and European government bonds were

steady on Friday, but were set for weekly losses.

Two-year Treasury yields were flat at 3.6085%,

having risen 12 basis points this week already, while the

10-year yield was steady at 4.0969% and up 10 bps

for the week.

Germany's 10-year Bund yields, the euro area's

benchmark, were up 1.5 basis points on the day at 2.65% and set

for a weekly rise of 2.5 bps.

The rise in yields offered support to the U.S. dollar

, which was holding near three-month highs at 99.5

against its major peers, although resistance seems heavy at

99.564 and 100.25.

The euro was flat at $1.1569 after the ECB kept its

rates at 2% for the third meeting in a row and sounded

moderately more positive on growth prospects.

The central bank also published a survey on Friday showing

euro zone bloc firms are seeing a slight improvement in business

conditions and that investment into sectors like artificial

intelligence is booming.

"What the data this week suggests is that maybe we have

got something fundamentally wrong about the impact of trade

tariffs," Morgan Stanley's Chief Europe Economist Jens

Eisenschmidt said, also highlighting the boost from AI.

"It doesn't make me revise anything dramatically, but it

makes me think."

In the commodities markets, oil prices fell and were headed

for a third straight monthly fall as a stronger dollar capped

gains and rising supply from major producers offset new Western

sanctions on Russian exports.

Brent crude futures slipped 0.9% to $64.55 a barrel,

while U.S. West Texas Intermediate crude was at $60.10,

down 0.8%.

Spot gold prices retraced some of the overnight gains

and were down 0.3% to $4,008 per ounce. They were down 2.5% for

the week and well below the record high of $4,381 hit just last

week.