SYDNEY - US and European stock futures rallied on Thursday on optimism over prospects of a peace deal between Ukraine and Russia, offsetting a jump in Treasury yields as hot inflation threatens to close the door to any policy easing in the US this year.

Global trade war fears persisted as US President Donald Trump said he would impose reciprocal tariffs as soon as Wednesday evening on every country that charges duties on US imports. Gold prices hovered not far from their record highs.

The Japanese yen was the biggest loser in the face of higher US yields, while the euro has been helped by Trump's phone calls with Russian President Vladimir Putin and Ukraine's Volodymyr Zelenskiy, raising hopes that the years-long conflict could be nearing an end.

Oil prices dropped, having been down more than 2 percent overnight. Wall Street staged a late rally to end the day mixed.

In Asia, EUROSTOXX 50 futures climbed 1 percent. Nasdaq futures rose 0.4 percent while S&P 500 futures gained 0.2 percent. Japan's Nikkei gained 1.1 percent while MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3 percent.

"The optimism is probably somewhat premature," said Kyle Rodda, a senior analyst at Capital.com.

"Early drafts of a peace deal by the United States included commitments from the Ukrainians not to push for NATO membership and to give up territory. Such a concession is a large ask, especially given the lack of trust that the Russians will commit to peace after Trump leaves office."

Overnight, data showed US consumer prices rose by the most in nearly 1-1/2 years in January. The closely watched core inflation index, which excludes food and energy prices, rose 0.4 percent in the month, above forecasts for 0.3 percent.

With the Federal Reserve already signaling no rush to cut rates further, investors scaled back expectations of more policy easing from the Federal Reserve this year to just 28 basis points, equivalent to just one cut.

Treasury yields jumped on the inflation data, with 10-year yields up 10 basis points overnight to a three-week top of 4.66 percent. They were down 2 bps on Thursday at 4.6151 percent.

Analysts at Barclays still expect one rate cut from the Fed this year.

"Risks are now skewing toward the Fed delivering no cuts this year, and we are putting somewhat more weight on off-baseline scenarios where rate hikes enter the conversation," they said in a note to client.

In the foreign exchange market, the dollar held at 154.52 yen, having jumped 1.3 percent overnight as US yields shot up. The euro fared much better, having recovered from earlier falls to be 0.2 percent firmer for the day and was 0.1 percent higher at $1.0392 on Thursday.

In commodities markets, oil prices extended their overnight slump on hopes for a peace deal between Russia and Ukraine that would mean the end of sanctions that have disrupted supply flows.

US crude fell 0.7 percent to $70.88 a barrel, after dropping 2.7 percent overnight and Brent was also 0.7 percent lower at $74.66, having dropped 2.4 percent overnight.

Gold was flat at $2,902 per ounce, not far from its record high of $2,942.7 hit on Tuesday.