NEW YORK/MILAN (Reuters) - Global equity markets rallied on Tuesday as U.S. and European tech stocks rebounded and the dollar strengthened ahead of U.S. payrolls data on Friday that could reveal the Federal Reserve’s next move on tapering its support to the economy. Most major U.S. and European stock indices rose more than 1%, while yields on the 10-year U.S. Treasury note, a touchstone for investor sentiment, edged above 1.5%. Another jump in crude oil futures fueled inflation fears. Investors are focused on Friday, when the U.S. unemployment report for September may determine when the Fed proceeds with plans to begin tapering $120 billion a month of bond purchases. Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, said the day’s rally in stocks was nothing more than a rebound after a weak stretch. The S&P 500 slid less than 4% peak-to-trough from late September, and is up almost 16% year to date. Friday’s report “will be telling about the direction of both interest rates and the economy, and by definition the equity markets as well,” Tuz said. Non-farm payrolls data is expected to show continued improvement in the labor market, with a forecast for 488,000 jobs to have been added last month, a Reuters poll showed. MSCI’s all-country world index, a U.S.-centric gauge of stock performance in 50 countries, closed up 0.69% after trading above 1% earlier in the session. European stocks closed up 1.17% as rising bank shares and encouraging results from chipmaker Infineon calmed nerves following a tech-fueled sell-off on Wall Street on Monday. The European tech sector jumped 2.2%, breaking a seven-session losing streak in which it fell 11.7%. European bank stocks rose 3.5% to more than a 1-1/2 year high. On Wall Street, the Dow Jones Industrial Average rose 0.92%, the S&P 500 gained 1.05% and the Nasdaq Composite added 1.25%. Inflation expectations jumped with the U.S. breakeven rate on five-year Treasury Inflation-Protected Securities (TIPS) rising to 2.61%, the highest level since late July. The 10-year Treasury note rose 5.5 basis points to yield 1.5362%. Germany’s 10-year bund yield, the benchmark for the region, rose 3.5 bps to -0.183%, or 30 basis points higher than it was two months ago. In Europe, a market-based gauge of long-term euro zone inflation expectations surged to a new six-year high as rising crude and record gas prices fanned inflation fears. The five-year euro forward swap hit 1.8369%, the highest since July 2015. It was 1.26% at the start of 2021. Short-dated yields have jumped as the U.S. Treasury eyes Oct. 18 as when it could run out of cash. Democrats planned a Wednesday vote in the Senate to suspend the U.S. debt ceiling, setting up yet another confrontation with Republicans that risks an economically crippling federal credit default. The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.16% to 93.997. The euro slid 0.24% at $1.1593, while the Japanese yen traded up 0.58% at $111.5100. Brent crude futures rose to a three-year high while U.S. benchmark oil hit its highest since 2014 after the Organization of the Petroleum Exporting Countries and allies stuck to their planned output increase rather than pumping even more crude. Brent crude rose $1.30 to settle at $82.56 a barrel. U.S. crude settled up $1.31 to $78.93 a barrel. Gold prices fell as firmer U.S. Treasury yields and a stronger dollar dented the safe-haven metal’s appeal. U.S. gold futures settled down 0.4% at $1,760.90 an ounce. Market focus in Asia was on whether embattled property developer China Evergrande would offer any respite to investors looking for signs of asset disposals. Trading in shares in the world’s largest indebted developer was halted on Monday but other Chinese property developers grappled with ratings downgrades on worries about their ability to repay debt. Bitcoin rose above the $50,000 mark for the first time in four weeks, adding to a series of gains since the start of October. It was last up 4.5% on the day.