* European stocks rise with Wall Street index futures

* Brent crude around $85 per barrel after attacks on Strait

of Hormuz shipping

* Yen rally stalls after forex intervention

(Recasts, adds comments, background)

By Stefano Rebaudo

Aug 4 (Reuters) - European stocks climbed alongside U.S.

futures on Tuesday, although a rebound in oil prices underscored

market scepticism that the U.S.-Iran war would be resolved

quickly through diplomacy.

Meanwhile the yen eased slightly, but held on to most of its

intervention-driven gains after last week's joint action by

Tokyo and Washington to support the currency.

Conflicting signals from the U.S. and Iran boosted

uncertainty, with the latest attack on shipping in the Strait of

Hormuz highlighting risks to global energy flows.

Brent futures rose 1.4% to $84.95 a barrel after

dropping 7% in the previous session to a three-week low.

Europe's STOXX 600 .STOXX was up 0.55%, with tech stocks

rising 1.7%.

Nasdaq futures climbed 0.67% and S&P 500 futures

increased 0.22%. The S&P 500 index jumped 1.48%

on Monday hitting 7,610.04, not far from its all-time high of

7,620.90, while the Dow Industrials reached a closing record

high.

MSCI's main world stocks index rose 0.05%.

Japan's Nikkei gained 0.32%.

"We are adding risk to sectors which should be less impacted

by higher rates. Tech and financials would be our favourite

sectors to add back risk in the portfolio," Mohit Kumar, an

economist at Jefferies, said, recalling the recent rally in bond

yields.

"One underlying factor that continues to support our medium

term bullish view is the amount of cash in the system," he

added.

Longer-dated U.S. Treasury yields rose to a 19-year high

last week after comments from U.S. Federal Reserve Chairman

Kevin Warsh raised concerns the Fed may not act aggressively to

head off inflation.

Market participants believe Warsh does not want to hike, and

the incoming data could provide him enough cover to stay put.

The first round of U.S. jobs data is due later on Tuesday.

With almost two-thirds of S&P 500 companies reporting for

the second quarter, 84% have beaten earnings estimates,

according to LSEG data and market participants .

"The AI capex boom remains intact," Eastspring Investments

analysts, including Chief Investment Officer Vis Nayar, wrote in

a note.

However, concerns linger elsewhere for Europe, with some

economists warning that its economy faces a more challenging

outlook than other regions as drought hampers Rhine shipping and

gas inventories remain under pressure.

YEN RALLY STALLS

Against the yen, the dollar was up 0.4% at 157.80

yen, rebuilding strength after coordinated intervention by U.S.

and Japanese authorities to prop up the yen last week.

The Japanese currency remains about 4% stronger against the

greenback compared with the levels a week ago that prompted

official support and marked the first U.S. intervention in the

Japanese foreign exchange market in 15 years.

However, market participants worried that Japan's

expansionary fiscal policy and the Bank of Japan's gradual pace

of rate hikes could weigh on the yen.

"The catalysts that can amplify the unwinding of short yen

positions (supporting the currency) are, potentially, lower

crude oil prices, BoJ policy tightening in September and

thereafter, and some moderation in prime minister Sanae

Takaichi's fiscal plans, in order to bring debt sustainability

back," Thierry Wizman, global forex and rates strategist at

Macquarie Group, said.

The U.S. dollar index, which measures the greenback's

strength against a basket of six currencies, was trading steady

not far from the lowest levels of the past two months at 99.98.