(Adds US markets, analyst comments, updates prices throughout,

adds NEW YORK to dateline)

* MSCI All-World rose almost 14% in the quarter, largest pct

increase since 2020

* Dollar gained 1.4% against peer currencies this quarter;

EM currencies hold up

* Brent falls nearly 40% for the quarter

By Rodrigo Campos and Amanda Cooper

NEW YORK/LONDON, June 30 (Reuters) - Stocks across the globe

on Tuesday were headed for their largest quarterly percentage

increase in six years, while Brent oil was on track for its

largest quarterly drop since 2020, as traders kept tabs on a

fragile ceasefire between the United States and Iran.

On the last day of the second quarter, the U.S. dollar was

set to rise against a basket of peers for a fourth

straight quarter, pushing the yen to a 40-year low as

expectations for U.S. interest rate hikes shifted dramatically.

Emerging market currencies as a bloc gained over

1% to the greenback throughout the quarter.

In energy markets, the Strait of Hormuz has reopened

gradually and haphazardly as hostilities between the U.S. and

Iran receded into a fragile ceasefire, knocking almost 40% off

the price of Brent oil this quarter.

A seemingly unstoppable boom in artificial intelligence

stocks kept the equities rally going for the quarter, with South

Korea's KOSPI up 68% and Taiwan's benchmark up

45%. The Nasdaq Composite added more than 20%. The MSCI

All-World index has gained 14% so far and

touched a record high earlier this month, marking its best

quarterly performance since 2020. Emerging Market stocks

are up 23% for the period.

Europe's STOXX 600, which does not have nearly as

many AI beneficiaries as many Asian or U.S. indexes, was still

up nearly 10% for the quarter, having risen every month since

March.

"Investors can't see an end in sight to this bull run," said

David Morrison, senior market analyst at Trade Nation. "Whenever

there's a bit of a selloff, we seem to be in a situation where

you get a fresh impetus to buy."

For the day, the Dow Jones Industrial Average rose

126.78 points, or 0.25%, to 52,309.52, the S&P 500 rose

28.81 points, or 0.39%, to 7,469.63 and the Nasdaq Composite

rose 207.36 points, or 0.81%, to 26,029.22.

MSCI's gauge of stocks across the globe rose

5.31 points, or 0.48%, to 1,117.36. The pan-European STOXX 600

index rose 0.78%, while Europe's broad FTSEurofirst 300

index rose 20.66 points, or 0.81%, while emerging

market stocks rose 16.86 points, or 0.99%, to

1,723.79. Japan's Nikkei rose 594.21 points, or 0.86%,

to 70,062.32.

THE WINNING DOLLAR

The dollar has been the standout winner this quarter among

developed currencies, gaining 1.4% against a basket of

peers. Yet emerging market currencies have strengthened 1.3%

this quarter against the greenback.

Investors are amassing bullish positions at a record pace

thanks to a remarkable re-pricing of the U.S. interest rate

outlook, which has flipped from cuts to hikes, due to the

strength of the U.S. economy and persistent inflationary

pressures beyond energy prices. Traders are pricing in at least

one rate hike by the Federal Reserve by the end of this year,

compared with earlier expectations of rate cuts.

The world's most influential central bankers are in the

Portuguese town of Sintra this week for the European Central

Bank's annual meeting and no one will be more in the spotlight

than new Federal Reserve Chair Kevin Warsh, who is scheduled to

address the gathering on Wednesday.

The dollar's rise has partly driven gold to a 14%

quarterly drop, its largest such fall in more than a decade,

while the yen has been driven to its weakest point in 40

years to trade around 162.38 per dollar on Tuesday. Traders were

on edge about a possible Japanese intervention, with Finance

Minister Satsuki Katayama issuing another warning.

Katayama's comments "avoided the verbal escalation that

often precedes a buying effort, instead reiterating that

authorities stand ready to respond at any time," said Karl

Schamotta, chief market strategist at Corpay.

That said, "we would note that Thursday's non-farm payrolls

report and Friday's Independence Day holiday - when U.S.

liquidity will thin dramatically - could provide attractive

opportunities for wrong-footing speculative short positions,"

Schamotta said.

Brent August crude futures, which expire on Tuesday,

were flat on the day. The contract was on track for a third

straight monthly decline, down about 20% so far in June and 38%

for the quarter. The more actively traded September contract

was also flat. U.S. crude was on track to fall

30% this quarter.

"I wouldn't say the market has priced out a risk premium,

but previously stranded ships have become available with the

increase in ships moving out of the Gulf, creating a temporary

wave of new supply," UBS analyst Giovanni Staunovo said.

Morgan Stanley said it now models an implied global oil

market surplus of 4.8 million barrels per day in 2027.