(Updates to midday U.S. trading)

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US stocks higher; Nasdaq up 1%

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Dollar muted as currency markets brace for Canada, Mexico

tariffs

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Oil prices, Treasury yields little changed

By Harry Robertson and Lawrence Delevingne

LONDON/BOSTON, Jan 31 (Reuters) - Global stocks rose on

Friday at the end of a volatile week for markets, with sentiment

buoyed by Apple's ( AAPL ) earnings report and an in-line U.S. inflation

reading.

Meanwhile, currency traders braced for U.S. President Donald

Trump to put 25% tariffs on Canada and Mexico as a Saturday

deadline neared, a move that could disrupt nearly $1.6 trillion

in annual trade.

The U.S. S&P 500 stock index rose 0.6% and was on

track to end the week broadly flat, while the tech-heavy Nasdaq

climbed 1.2% but was set to end the week slightly lower.

The Nasdaq dropped 2.9% on Monday as the surging popularity

of cheap Chinese AI model DeepSeek shook investor confidence in

U.S. tech stocks and sent chipmaker Nvidia ( NVDA ) plunging

17%.

Earnings reports and forecasts this week from the likes of

Meta and Tesla have helped sentiment recover

somewhat.

Apple ( AAPL ) added to the cautiously optimistic mood late

on Thursday when it forecast relatively strong sales growth,

pushing its stock up about 0.5% in Friday trading.

Europe's continent-wide Stoxx 600 index was last up

0.1%, with tech shares up 1.7%.

In currency markets, options contracts showed investors were

preparing for the potential for swings in the Canadian dollar

and Mexican peso . The Canadian dollar was last

up around 0.16% on the day and the peso was 0.5% higher in

choppy trading.

Trump has set a Saturday deadline to impose punitive duties

over his demands that Canada and Mexico take stronger action to

halt the flow of illegal immigrants and the deadly opioid

fentanyl and precursor chemicals into the United States.

"There is big market complacency in terms of the manner that

the market could digest the tariffs," said Michael Nizard,

multi-asset chief investment officer at Edmond de Rothschild.

The U.S. dollar index was little changed on the day but on

track for a small weekly gain. The euro and sterling were

both muted .

Data on Friday showed the U.S. personal consumption

expenditures (PCE) price index rose 0.3% last month after an

unrevised 0.1% gain in November, in line with economists'

expectations.

"Disinflation continues, and should continue given

underlying trends," David Alcaly, lead macroeconomic strategist

at Lazard Asset Management, said in an email.

"Concerns about recent bumpiness are overblown and have more

to do with the potential for inflationary policy change like

tariffs than with current conditions."

The figures also showed consumer spending surged, briefly

pushing up 10-year Treasury yields, which were last little

changed at 4.525%.

Yields, which move inversely to prices, are on track to fall

more than 10 basis points across the week, largely reflecting

investor buying as tech stocks fell on Monday.

Data on Thursday showed U.S. economic growth slowed in the

fourth quarter, but remained robust enough for investors to

expect the Federal Reserve - which held interest rates on

Wednesday - to lower borrowing costs only gradually this year.

German bond yields fell for a second day after

weaker than expected underlying inflation data. The European

Central Bank cut rates on Thursday and signalled more easing was

coming.

Brent crude oil futures were flat at $76.86 per

barrel, set for a weekly decline.