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.O 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 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 ASML.AS Infineon IFXGn.DE and Taiwan Semiconductor Manufacturing 2330.TW.

The MSCI All-World index .MIWD00000PUS edged into positive territory, helped by a rally in European stocks, where technology shares outperformed the broader STOXX 600 .STOXX, 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 thecountry'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 ESc1 rose 0.6%, whileNasdaq futures NQc1 gained 1%, thanksin part to the rally in Nvidia, which has already risen by 200% since this point last year.

"Nvidia had great figures, but really it is avery narrow market now and you are exposed to one sector, and we see from history thatbeing exposed just to one sector is a big risk," saidPascal 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 .CSI300 falling 0.9%, while Hong Kong's Hang Seng Index .HSI similarly slid 1.4%.

In Britain, Prime Minister Rishi Sunak surprised both markets and other lawmakerson Wednesday by calling a nationalelection for July 4.

The pound GBP=D3, which hit two-month highs after data on Wednesday showed inflation in Britain slowingless 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%.0#BOEWATCH

The euro EUR=EBS 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 NZD=D3 held near two-month highs around $0.61265after the Reserve Bank of New Zealand wrongfooted markets on Wednesday by warning cuts were unlikely until far into 2025.

The yen JPY=EBS held steady on the day at 156.71per dollar, having that touched its lowest in over three weeks earlier on.

In commodities, gold fell 0.4% to $2,368an ounce XAU=, but was still within sight of Monday's record high of $2,449.89.

Oil prices rose, with Brent crude futures LCOc1 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

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