(Updates with early afternoon trading)
By David Randall
NEW YORK, July 6 (Reuters) - World stock markets rose and the euro climbed to a three-week peak on Friday as the threat of tariffs by the United States and China on billions of dollars of trade became a reality, though concerns about the conflict escalating capped the appetite for risk.
MSCI's measure of world equities markets rose 0.8 percent to the highest level since June 22 while Asian stocks climbed nearly half a percent, led by a rebound in Chinese shares.
Stocks edged higher in Europe, with the pan-European FTSEurofirst 300 index up 0.2 percent.
U.S. equities marched higher in mid-afternoon trade after monthly jobs data showing a 213,000 gain in non-farm payrolls in June and stable wage growth.
The Dow Jones Industrial Average rose 139.29 points, or 0.57 percent, to 24,496.03, the S&P 500 gained 24.77 points, or 0.91 percent, to 2,761.38 and the Nasdaq Composite added 95.26 points, or 1.26 percent, to 7,681.68.
Benchmark indexes had opened in negative territory and gradually rose in morning trade.
"The trade headlines are at this point keeping the market uncertain," said Quincy Krosby, chief market strategist at Prudential Financial.
Signs of nervousness about the trade outlook were evident elsewhere in global markets with the Japanese yen and the Swiss franc firm against the dollar while core U.S. and German bonds were in demand.
Benchmark 10-year Treasury notes last rose 7/32 in price to yield 2.8145 percent, from 2.84 percent late on Thursday.
"Trade war concerns have shot up to the top of our concerns for investors," said Isabelle Mateos y Lago, chief multi-asset strategist at BlackRock Investment Institute in London.
"We have to be aware that we are only one tweet away from much broader tariffs becoming a reality," she said, adding that investors were trimming broad exposure to riskier assets.
The latest flows data confirmed that trend. Investors have pulled money out of emerging markets and European equities more quickly over the last two months than in 2016, Bank of America Merrill Lynch strategists said on Friday in a weekly note.
The United States and China slapped tit-for-tat duties on $34 billion worth of each other's imports on Friday, with Beijing accusing Washington of triggering the "largest-scale trade war" as the world's two biggest economies sharply escalated their conflict.
U.S. President Donald Trump has warned that the United States may ultimately target over $500 billion worth of Chinese goods, an amount that roughly matches its total imports from China last year.
Copper, seen as a barometer of the world's economic strength because of its wide industrial use, fell to near a one-year low, at $6,221.50 per tonne, before recouping some losses.
U.S. crude rose 1.07 percent to $73.72 per barrel and Brent was last at $77.11, down 0.36 percent on the day. (Reporting by David Randall; additional reporting by Sinead Carew; editing by Dan Grebler)