(Updated at 2:09 p.m. ET (1809 GMT)

By Chris Prentice and Amanda Cooper

NEW YORK/LONDON, April 23 (Reuters) - Global shares rose

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

are focused on earnings reports from the U.S. megacaps, and the

yen tumbled to multi-year lows against the dollar and the euro.

Treasury yields dipped after data showed that U.S. business

activity cooled to a four-month low.

Easing concerns about the threat of a major

re-escalation of tension in the Middle East and a focus on

company earnings brought renewed risk appetite from investors.

MSCI's gauge of stocks across the globe

rose 9.47 points, or 1.26%, to 758.76 by 2:09 p.m. ET (1809

GMT), further pulling away from Friday's two-month low.

On Wall Street, the Dow Jones Industrial Average

rose 255.14 points, or 0.67%, to 38,495.12, the S&P 500

gained 63.23 points, or 1.26%, to 5,073.83 and the Nasdaq

Composite gained 266.57 points, or 1.73%, to 15,717.87.

The FTSE 100 hit a record high, as the STOXX 600

rose 1.09% on gains in 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.

"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 was

comfortably supported by the view among investors that no U.S.

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.

"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 next," said Shane Oliver, chief

economist at AMP, noting that security concerns also remained.

"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 ( META ), Alphabet

and Microsoft ( MSFT ) 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 see just 40 basis points' worth of cuts

this year, compared with expectations for 150 bps of cuts at the

beginning of the year.

The yield on benchmark U.S. 10-year notes

fell 3.5 basis points to 4.588%, from 4.623% late on Monday.

The 30-year bond yield fell 1.5 basis

points to 4.7086% from 4.724% late on Monday.

The 2-year note yield, which typically moves

in step with interest rate expectations, fell 4.4 basis points

to 4.9266%, from 4.971% late on Monday.

The European Central Bank is expected to cut rates in June

and this divergence with the Fed is weighing on the euro

. It was last up 0.14% at $1.0667, not far off last

week's five-month low of $1.0601.

The yen recovered after striking another 34-year

low against the dollar.

Japan's 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.

In commodities, spot gold reversed earlier losses,

up 0.08% to $2,328.14 an ounce. U.S. gold futures fell

0.3% to $2,325.30 an ounce.

Oil prices were up as investors continued to assess the

situation in the Middle East. U.S. crude gained 1.76% to

$83.34 a barrel and Brent rose to $88.39 per barrel, up

1.6% on the day.

(Additional reporting by Stella Qiu in Sydney; Editing by Ros

Russell, Tomasz Janowski and Emelia Sithole-Matarise)