GLOBAL MARKETS-Wall Street follows global stocks higher, crude prices ease on potential US-Iran truce extension

* S&P 500 set for longest weekly winning streak since December 2023

* Global stocks hit fresh record high

* Dollar set for weekly dip

* U.S. Treasury yields dip for fourth straight session

* Sources say Hormuz deal awaiting Trump's approval (Updates to U.S. market open)

By Stephen Culp

NEW YORK, May 29 (Reuters) - The S&P 500 followed world shares higher and crude prices retreated on Friday as investors neared the end of a holiday-shortened week with renewed hopes of progress toward a peaceful resolution to the Iran war.

The Dow joined the S&P 500 in positive territory while the tech-heavy Nasdaq was essentially unchanged, and U.S. Treasury yields dipped as markets prepared to turn the page on a week and month marked by a tug-of-war between fears that air strikes could shatter a fragile truce and signs that Washington and Tehran are moving closer to the negotiating table.

The S&P 500 is poised to notch its ninth straight weekly gain, its longest winning streak since the one that ended in December 2023.

All three indexes are set to register monthly advances.

The United States and Iran had agreed to extend their ceasefire and lift shipping restrictions as peace negotiations proceed, sources told Reuters, but U.S. President Donald Trump had yet to approve the deal which, according to Iranian state media, has not yet been finalized.

"Both the U.S. and the Iranians are incented to get this done, because the conflict isn't good for either side," said Michael Monaghan, portfolio manager at Founder ETFs in Dallas.

"Each side was probably trying to put on the last tiny bit of horizontal escalation to get to the best possible outcome ... Hopefully, we're through that and we'll get a deal," he added.

The Dow Jones Industrial Average rose 218.86 points, or 0.43%, to 50,888.48, the S&P 500 rose 9.06 points, or 0.12%, to 7,572.73 and the Nasdaq Composite fell 2.43 points, or 0.01%, to 26,915.85.

European shares gained ground, and were on track to log monthly gains as a potential deal to extend the ceasefire and reopen the Strait of Hormuz supported investor sentiment.

MSCI's gauge of stocks across the globe rose 4.36 points, or 0.40%, to 1,129.27.

The pan-European STOXX 600 index rose 0.25%, while Europe's broad FTSEurofirst 300 index rose 6.02 points, or 0.24%.

Emerging market stocks rose 26.16 points, or 1.51%, to 1,750.80.

Brent crude oil prices eased as the market awaited confirmation that the United States and Iran have extended their truce.

U.S. crude fell 0.1% to $88.80 a barrel and Brent fell to $92.48 per barrel, down 1.31% on the day.

Treasury yields were headed lower for the fourth straight session, closing out a week in which reported progress in U.S.-Iran peace negotiations fueled market optimism.

The yield on benchmark U.S. 10-year notes fell 0.6 basis points to 4.451%, from 4.455% late on Thursday. The 30-year bond yield fell 0.1 basis points to 4.9837% from 4.985% late on Thursday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 0.9 basis points to 4.016%, from 4.025% late on Thursday.

The dollar inched higher but remained on course for a small weekly loss amid fluctuating hopes for a near-term resolution to the Middle East conflict.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05% to 99.04, with the euro down 0.04% at $1.1645.

Against the Japanese yen, the dollar strengthened 0.05% to 159.32.

In cryptocurrencies, bitcoin fell 1.16% to $72,618.43. Ethereum declined 1.21% to $1,986.70.

Gold got a boost from ceasefire optimism but remained on course for a monthly drop.

Spot gold rose 1.03% to $4,537.99 an ounce. U.S. gold futures rose 0.74% to $4,532.40 an ounce.

(Reporting by Stephen Culp; Additional reporting by Iain Withers in London and Tom Westbrook in Singapore; Editing by Joe Bavier)