(Updates prices at 1117 GMT)

By Amanda Cooper

LONDON, May 23 (Reuters) - Global shares edged up on

Thursday after results from AI poster-child Nvidia ( NVDA )

ignited a rally across tech stocks, although the prospect that

interest rates could stay higher for longer than many had

expected tempered some investor optimism.

The dollar was set for its best weekly performance since

early April, after minutes from the Federal Reserve's latest

policy meeting on Wednesday reflected rate-setters' belief that

it will take longer than previously thought for inflation to

return to the central bank's 2% target.

Nvidia ( NVDA ) shares rose nearly 7% in premarket trading. The AI

darling forecast quarterly revenue above estimates after the

bell on Wednesday, which lifted shares in other AI-linked

companies such as ASML Infineon and Taiwan

Semiconductor Manufacturing ( TSM ).

The MSCI All-World index edged into positive

territory, helped by a rally in European stocks, where

technology shares outperformed the broader STOXX 600,

which rose 0.4%.

The prospect of a tougher Fed, a warmer-than-expected UK

inflation print and a sobering assessment of New Zealand's

inflation problems from the country's central bank have caused

investors to pare back their expectations for the pace and scale

of global rate cuts expected this year.

"One thing that's interesting from the last 24 hours that

can be taken away is still the uncertainty from central banks

about policy settings and at what levels interest rates have to

be at, and where they need to potentially stay at, in order to

tame inflation," said Kyle Rodda, senior financial market

analyst at Capital.com.

"That's causing uncertainty from a policy point of view, but

it's obviously also causing uncertainty from a market point of

view."

NVIDIA KEEPS ON ROLLING

S&P 500 futures rose 0.6%, while Nasdaq futures

gained 1%, thanks in part to the rally in Nvidia ( NVDA ), which

has already risen by 200% since this point last year.

"Nvidia ( NVDA ) had great figures, but really it is a very narrow

market now and you are exposed to one sector, and we see from

history that being exposed just to one sector is a big risk,"

said Pascal Koeppel, chief investment officer of Vontobel Swiss

Financial Advisers.

"We have seen that with many sectors, oil, banks before

2008," he said, "As an investor you should diversify a little

bit."

Meanwhile, geopolitical tensions were not far from

investors' minds as China's military started two days of

"punishment" drills held in five areas around Taiwan just days

after new Taiwan President Lai Ching-te took office.

That sent Chinese blue chips falling 0.9%, while

Hong Kong's Hang Seng Index similarly slid 1.4%.

In Britain, Prime Minister Rishi Sunak surprised both

markets and other lawmakers on Wednesday by calling a national

election for July 4.

The pound, which hit two-month highs after data on

Wednesday showed inflation in Britain slowing less than

expected, was last up 0.1% at $1.2726. Investors have taken an

axe to their bets that the Bank of England will cut rates next

month, to around 10% from 50%.

The euro got a boost from a survey that showed

German business activity grew for a second straight month in

May, underpinning confidence that the euro zone's largest

economy could be turning a corner. It was last up 0.2% at

$1.084.

The New Zealand dollar held near two-month highs

around $0.61265 after the Reserve Bank of New Zealand

wrongfooted markets on Wednesday by warning cuts were unlikely

until far into 2025.

The yen held steady on the day at 156.71 per

dollar, having that touched its lowest in over three weeks

earlier on.

In commodities, gold fell 0.4% to $2,368 an ounce,

but was still within sight of Monday's record high of $2,449.89.

Oil prices rose, with Brent crude futures up 0.8% at

$82.53 a barrel.

(Additional reporting by Marc Jones in London and Rae Wee in

Singapore; Editing by Sam Holmes, Gareth Jones and Toby Chopra)