GLOBAL MARKETS-Wall Street follows world stocks higher, crude prices ease on potential US-Iran truce extension

* S&P 500 set for longest weekly winning streak since December 2023

* Global stocks hit fresh record high

* Dollar set ​for weekly ⁠dip

* U.S. Treasury yields dip for fourth straight session

* Sources say Hormuz deal awaiting ​Trump's approval (Updates to mid-afternoon trading, adds photos)

NEW YORK, May 29 (Reuters) - U.S. stocks followed world shares higher and crude prices retreated on Friday as investors neared the end of a holiday-shortened week with renewed hopes ​of progress ‌toward a peaceful resolution to the Iran war.

A narrow, tech-led rally lifted all three major U.S. stock indexes to modest gains, and Treasury yields dipped as markets prepared to turn the page on a week ⁠and month marked by a tug-of-war between fears that air strikes could shatter a fragile truce and signs ⁠that Washington and Tehran are moving closer to the negotiating table.

The S&P ​500 is poised to notch its ninth straight weekly gain, its longest winning streak since December 2023.

All three indexes are set to register monthly advances.

Even so, the indexes had pared from session highs as the closing bell drew near.

"This administration watches the markets and they like to do big things when the markets are closed to control the messaging before the market has a ​chance to react," ‌said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. The United States and Iran had agreed to extend their ceasefire and lift shipping restrictions as peace negotiations proceed, sources told Reuters, but U.S. President Donald Trump had yet to approve the deal which, according to Iranian state media, has not yet been finalized.

"If the memo of understanding is approved by President Trump and we truly get 60 days of the Strait of Hormuz re-opened ... I think 60 days should be plenty of time to come to a more substantive agreement," Mayfield added.

The three-month-long conflict ​has put upward price pressure on inflation, which threatens to grow less transitory and more established the longer the war drags on. U.S. Federal Reserve officials are now mulling the possibility of hiking interest ‌rates to counter that growing risk.

"The market has been pricing about a coin flip odds of a hike (in the fourth quarter) for a couple of weeks now," Mayfield said. "We'll have plenty of data by then, I don't expect the Fed to do much ‌of anything.

"It's a high bar to clear." The Dow Jones Industrial Average rose 358.82 points, or 0.71%, to 51,027.94, the S&P 500 rose 19.91 points, or 0.26%, to 7,583.61 and the Nasdaq Composite rose 59.92 points, or 0.23%, to 26,978.21.

European shares closed modestly higher and scored monthly gains to cap a month marked by hopes for a deal that would reopen the Strait ​of Hormuz, the closure of which has strained the global economy and agitated markets. MSCI's gauge of stocks across the globe rose 5.92 points, or 0.53%, to 1,130.64. The pan-European STOXX 600 index rose 0.14%, while Europe's broad FTSEurofirst 300 ‌index rose 2.53 points, or 0.10%. Emerging market stocks rose 26.90 points, or 1.56%, to 1,751.59.

Brent crude oil prices eased as the market awaited confirmation that the United States and Iran have extended their truce. U.S. crude fell 1.73% to settle at $87.36 per barrel, while Brent settled at $92.05 per barrel, down 1.77% on the day.

Treasury yields were lower for the fourth straight session, closing out a week in ⁠which reported progress ⁠in U.S.-Iran peace negotiations fueled market optimism. The yield on benchmark U.S. 10-year notes fell 1.8 basis points to 4.437%, from 4.455% ‌late on Thursday. The 30-year bond yield fell 0.5 basis points to 4.9796% from 4.985% late on Thursday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2.5 basis points to 4%, ​from 4.025% late on Thursday.

The dollar dipped, and ​remained on course for a small weekly loss in the wake of reports of a U.S.-Iran interim agreement. The dollar index, which ‌measures the greenback against a basket of currencies including the yen and the euro, fell 0.11% to 98.89, with the euro up 0.12% at $1.1665. Against the Japanese yen, the dollar strengthened 0.01% to 159.23.

Gold got a boost from ceasefire optimism but remained on course for a monthly drop. Spot gold rose 1.51% to $4,559.94 an ounce. U.S. gold futures rose 1.28% to $4,556.90 an ounce.