U.S. stock futures nudged higher and Treasury yields edged lower in early European trade on Friday, as investors held positions steady ahead of crucial U.S. jobs data.

Sovereign bonds that had been hammered earlier this week steadied and stocks rallied Thursday, with sentiment turning positive following comments from Federal Reserve Governor Christopher Waller.

The policymaker signaled that the Fed might not need to hike rates later this month if August inflation data are soft. In response, traders toned down their rate-hike bets, with the market now pricing around a 50-50 chance that the Fed holds rates steady.

Yields on 10-year Treasurys fell 1.8 basis points to 4.755%, while yields on 30-year bonds slipped 1.7 basis points to 5.234%. However, a hotter-than-expected nonfarm payrolls report later Friday could revive expectations for higher rates.

Oil prices were on pace for their largest weekly gain since mid-July as a flare-up in U.S.-Iran hostilities provoked fears of prolonged supply disruption. Vice President JD Vance told a press briefing that the conflict isn't a war, but his comments did little to cool markets as Brent crude nudged higher to trade close to $96 a barrel.

In equity markets, Asian stocks rallied, with Japan's Nikkei Stock Average advancing 1.3% and Hong Kong's Hang Seng Index up 2%.

U.S. stock futures were mostly in the green. Futures for the S&P 500 were 0.1% higher after the index notched its best day in a month Thursday. Futures for the Dow Jones Industrial Average were flat, while Nasdaq futures rose 0.4%. Adobe shares fell around 3.2% after-hours following the appointment of a new chief executive.

Artificial intelligence-related stocks led European indexes higher, with ASML, the continent's most valuable company, adding 1.6%. Automaker Volkswagen also gained, jumping 6% after its board agreed to double job cuts to 100,000. The Europe-wide Stoxx 600 was 0.1% higher.

The yen slipped against the dollar after touching a one-month high amid continued intervention watch. Gold fell back on the stronger dollar, but held above $4,500 a troy ounce. Bitcoin also retraced some gains, but held above the $80,000 mark.

As well as watching for Friday's jobs report, investors will position for a long weekend, with U.S. trading floors closing for Labor Day on Monday.

Next week's inflation data will also be a key indicator for any interest rate decisions by the Fed.